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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 Coarclay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

I'm Joe, Matthew and Washington. Thanks for coming along with Thursday edition. Yeah you made it to Little Friday. We have a lot of wood to chop here, or should I say a lot of wine to drink. The big development this morning is we wait for more news on tariffs. Donald Trump going after the wine, the champagne and the other alcoholic beverages from Europe. As you heard Charlie Pellett mentioning, it's moving the stocks. And boy, what a time to pick this, right. I thought we all stopped drinking because of the GLP ones. Now this you're gonna take my Brunello de Montalcino away. As the President writes, the US will shortly place it's a two hundred percent tariff on all wines, champagnes and alcoholic products coming out of France and other EU represented countries. Yes, your shotow enough to pop could double in price. He says, this would be great for the wine and champagne businesses in the US. Okay, so we're drinking California starting pretty soon, but you can't get champagne here in the US. And he knows that because well, Donald Trump has his name on Sparkley Wine in Virginia. Right. So, Howard Lutnick making the rounds this morning, because it's Thursday, every cabinet secretary is on TV somewhere, in this case, the Commerce secretary on Bloomberg TV talking about EU tariffs. Here's what he said.

I'm Joe, Matthew and Washington. Thanks for coming along with Thursday edition. Yeah you made it to Little Friday. We have a lot of wood to chop here, or should I say a lot of wine to drink. The big development this morning is we wait for more news on tariffs. Donald Trump going after the wine, the champagne and the other alcoholic beverages from Europe. As you heard Charlie Pellett mentioning, it's moving the stocks. And boy, what a time to pick this, right. I thought we all stopped drinking because of the GLP ones. Now this you're gonna take my Brunello de Montalcino away. As the President writes, the US will shortly place it's a two hundred percent tariff on all wines, champagnes and alcoholic products coming out of France and other EU represented countries. Yes, your shotow enough to pop could double in price. He says, this would be great for the wine and champagne businesses in the US. Okay, so we're drinking California starting pretty soon, but you can't get champagne here in the US. And he knows that because well, Donald Trump has his name on Sparkley Wine in Virginia. Right. So, Howard Lutnick making the rounds this morning, because it's Thursday, every cabinet secretary is on TV somewhere, in this case, the Commerce secretary on Bloomberg TV talking about EU tariffs. Here's what he said.

The EU is just so many years treated us so harshly. They just can't stop. Look, their tariffs are way up here and our tariffs are down here. How about relax, let us balance it. We are your largest most important trading partner. Treat us with respect and let's get a little And Donald Trump is out there's saying balance, balance, Balance. April second, he's going to describe his balance. We're going to do it together.

The EU is just so many years treated us so harshly. They just can't stop. Look, their tariffs are way up here and our tariffs are down here. How about relax, let us balance it. We are your largest most important trading partner. Treat us with respect and let's get a little And Donald Trump is out there's saying balance, balance, Balance. April second, he's going to describe his balance. We're going to do it together.

April second. Of course, that's the date the reciprocal tariffs take effect. Howard Lutnick on Bloomberg's surveillance, making the case, beating the drum as we now turn to Jenny Welch, imagine at this moment being the chief geoeconomics analyst at Bloomberg Economics. What a time to have your business card. Great to see you, Thank you for coming in. This is happening as the President sits down with the NATO Secretary General, which I'll ask you about. We might even get a taste of their conversation a little bit later on this hour. But boy, this really gets back to the noise and this hits home for people. Right, my wine's going to double in price. That's sort of different than steel and aluminum, right.

April second. Of course, that's the date the reciprocal tariffs take effect. Howard Lutnick on Bloomberg's surveillance, making the case, beating the drum as we now turn to Jenny Welch, imagine at this moment being the chief geoeconomics analyst at Bloomberg Economics. What a time to have your business card. Great to see you, Thank you for coming in. This is happening as the President sits down with the NATO Secretary General, which I'll ask you about. We might even get a taste of their conversation a little bit later on this hour. But boy, this really gets back to the noise and this hits home for people. Right, my wine's going to double in price. That's sort of different than steel and aluminum, right.

Absolutely.

Absolutely.

I think this is also an interesting reminiscence of the previous trade war with Europe back in Trump's first term, where he also threatened French wine. At that point in time, they back down from it, So maybe there is a chance that they'll back down from this as well, and we can avoid, yeah, paying more at the liquor store.

I think this is also an interesting reminiscence of the previous trade war with Europe back in Trump's first term, where he also threatened French wine. At that point in time, they back down from it, So maybe there is a chance that they'll back down from this as well, and we can avoid, yeah, paying more at the liquor store.

This is a direct response, I guess to the bourbon levies that we got from Europe yesterday, went after Kentucky Bourbon blue ds Harley. These are pretty narrow though, right, and so is wine. I mean, are we tinking around the edges here. When you talk about aluminum and steel, that's big business.

This is a direct response, I guess to the bourbon levies that we got from Europe yesterday, went after Kentucky Bourbon blue ds Harley. These are pretty narrow though, right, and so is wine. I mean, are we tinking around the edges here. When you talk about aluminum and steel, that's big business.

That's big bigness. And really what happened here is that Europe had snapback tariffs from that previous trade ward. They just let them come back into play, and they're intentionally targeting these politically salient industries in the United States and counties that voted for Trump.

That's big bigness. And really what happened here is that Europe had snapback tariffs from that previous trade ward. They just let them come back into play, and they're intentionally targeting these politically salient industries in the United States and counties that voted for Trump.

Right.

Right.

It's a tactic that we've seen other players use, like China with agricultural terrifts as well. The intent is to get him to back off. Obviously, this might lead to more of an escalation. And to your point, we were expecting April second to be the main showdown with the reciprocal terrorists. We're already having an escalation just based off of the steel of aluminum, and I think that really highlights the volatility of this moment.

It's a tactic that we've seen other players use, like China with agricultural terrifts as well. The intent is to get him to back off. Obviously, this might lead to more of an escalation. And to your point, we were expecting April second to be the main showdown with the reciprocal terrorists. We're already having an escalation just based off of the steel of aluminum, and I think that really highlights the volatility of this moment.

This is soon right, shortly he said we'll place some two hundred percent tariff on the wines, et cetera. I believe it was Jonathan Farah who asked Howard Lutnik this morning, you know what's the timeline here? It didn't really seem to answer it. Or so again, are we just riffing or maybe that is part of the April second reciprocal We have no idea.

This is soon right, shortly he said we'll place some two hundred percent tariff on the wines, et cetera. I believe it was Jonathan Farah who asked Howard Lutnik this morning, you know what's the timeline here? It didn't really seem to answer it. Or so again, are we just riffing or maybe that is part of the April second reciprocal We have no idea.

Well, part of it too is waiting for the EU to make their full responsors the snapback terraffs that have to come into place. But there's additional terrafs that the EU is going to be voting on later this month on top of those snapback terriffs from before. So maybe part of this is just the negotiation in public to try and walk the EU back before they have some of those internal conversations.

Well, part of it too is waiting for the EU to make their full responsors the snapback terraffs that have to come into place. But there's additional terrafs that the EU is going to be voting on later this month on top of those snapback terriffs from before. So maybe part of this is just the negotiation in public to try and walk the EU back before they have some of those internal conversations.

Look at this. Just as we're talking, Producer James puts the headline here in front of me. EU Trade Commissioner to have call with the US counterpart on Friday. So we're drinking wine this weekend? Is that the European wine?

Look at this. Just as we're talking, Producer James puts the headline here in front of me. EU Trade Commissioner to have call with the US counterpart on Friday. So we're drinking wine this weekend? Is that the European wine?

Maybe I would say buy it now just in case.

Maybe I would say buy it now just in case.

Okay, stockpile this. Boy, what a moment we're in here. And now you're a geoeconomics analyst and we frequently align you with geopol not you know, trade war is over alcohol is? Does this actually move the needle in your space?

Okay, stockpile this. Boy, what a moment we're in here. And now you're a geoeconomics analyst and we frequently align you with geopol not you know, trade war is over alcohol is? Does this actually move the needle in your space?

I think everything that President Trump has been doing to date has been moving the needle in terms of how we think about economic coercion and economic state craft. Toolkits right, his willingness to use tariffs not just as an instrument of trade policy, but of all foreign policy.

I think everything that President Trump has been doing to date has been moving the needle in terms of how we think about economic coercion and economic state craft. Toolkits right, his willingness to use tariffs not just as an instrument of trade policy, but of all foreign policy.

So let's talk about geopolitics a little bit here, because this is a very serious meeting actually today at the White House. The Secretary General of NATO probably doesn't have household name recognition like say Emmanuel Macron or President Zelenski, but this is going to get to the heart of some real tension between the US and Europe. As you've pointed out a couple of things that we're going to be looking at here. It's going to involve trade, certainly the terror off conversation we're having, but really it's going to be about Ukraine and the US commitment to NATO, which is a much bigger question when you think of it here.

So let's talk about geopolitics a little bit here, because this is a very serious meeting actually today at the White House. The Secretary General of NATO probably doesn't have household name recognition like say Emmanuel Macron or President Zelenski, but this is going to get to the heart of some real tension between the US and Europe. As you've pointed out a couple of things that we're going to be looking at here. It's going to involve trade, certainly the terror off conversation we're having, but really it's going to be about Ukraine and the US commitment to NATO, which is a much bigger question when you think of it here.

Yeah.

Yeah.

Absolutely, this visit is taking place at a pretty stark time for Europe or they're facing a trade war with the United States and also facing this pivot essentially that President Trump has undertaken over the last month of reproach mot with Moscow, putting a lot more pressure on Ukraine. Now there's been a successful meeting, it looks like between US and Ukrainian officials. Earlier this week that maybe has walked some of that pressure back, but I think Europe is still reeling from that pivot and thinking about what it means now for it to have to stand up for itself and hold its own security without being able to rely on the US.

Absolutely, this visit is taking place at a pretty stark time for Europe or they're facing a trade war with the United States and also facing this pivot essentially that President Trump has undertaken over the last month of reproach mot with Moscow, putting a lot more pressure on Ukraine. Now there's been a successful meeting, it looks like between US and Ukrainian officials. Earlier this week that maybe has walked some of that pressure back, but I think Europe is still reeling from that pivot and thinking about what it means now for it to have to stand up for itself and hold its own security without being able to rely on the US.

They're going to be in the Oval Office at least by the schedule five minutes from now, and things may well run a little bit late here. Much of this will have to do with the spending commitments right that NATO members make, also the veracity of Article five. Donald Trump has recently questioned this, again, suggesting that we may not defend allies who don't pay the full freight he wants. Five percent is that the going right now?

They're going to be in the Oval Office at least by the schedule five minutes from now, and things may well run a little bit late here. Much of this will have to do with the spending commitments right that NATO members make, also the veracity of Article five. Donald Trump has recently questioned this, again, suggesting that we may not defend allies who don't pay the full freight he wants. Five percent is that the going right now?

Five percent is above and beyond what most NATO members can reach. Poland is the country that's closest to it. In the US as well below five percent, and frankly, it would break the bank for a lot of European NATO members. That being said, they have raised defense spending over time, including since you know, Trump put this pressure on them in his first term. But the challenge is really going to be how they do that while managing debt, How they do that with the defense industry that's much smaller than the United States. I mean, the prospect of Europe having to stand up for itself. That's not a one year, couple months effort. It's something that will take many years to build up that capacity.

Five percent is above and beyond what most NATO members can reach. Poland is the country that's closest to it. In the US as well below five percent, and frankly, it would break the bank for a lot of European NATO members. That being said, they have raised defense spending over time, including since you know, Trump put this pressure on them in his first term. But the challenge is really going to be how they do that while managing debt, How they do that with the defense industry that's much smaller than the United States. I mean, the prospect of Europe having to stand up for itself. That's not a one year, couple months effort. It's something that will take many years to build up that capacity.

Yeah, this is quite remarkable. He was asked about this by NBC News that we would not protect NATO members who fail to meet these spending demands. Quote, it's common sense, right, If they don't pay, I'm not going to defend them. Unquote. If you're the NATO Secretary General, how do you get into this today in the oval office?

Yeah, this is quite remarkable. He was asked about this by NBC News that we would not protect NATO members who fail to meet these spending demands. Quote, it's common sense, right, If they don't pay, I'm not going to defend them. Unquote. If you're the NATO Secretary General, how do you get into this today in the oval office?

So I think one upside for the Secretary General is that he has also been urging European NATO members to spend more on defense and has echoed some of the higher numbers that President Trump has earned out there. I think the other way he could potentially frame this as is the amount of benefits that NATO and NATO allies present to the United States in terms of cost cutting. Right, the US has bases in Europe that provide for US security back at home, you're closer to Russian missile silos. Second, those NATO members are kind of your front line. They're providing Sure, maybe not as much as you would like them to in terms of troops and weapons, but they are covering some of those costs for you. And third, just the prospect of NATO as an alliance and the deterrence value that that creates with Russia, with China, with Iran is unmatched elsewhere in the world. No one else has that many allies that they can draw upon.

So I think one upside for the Secretary General is that he has also been urging European NATO members to spend more on defense and has echoed some of the higher numbers that President Trump has earned out there. I think the other way he could potentially frame this as is the amount of benefits that NATO and NATO allies present to the United States in terms of cost cutting. Right, the US has bases in Europe that provide for US security back at home, you're closer to Russian missile silos. Second, those NATO members are kind of your front line. They're providing Sure, maybe not as much as you would like them to in terms of troops and weapons, but they are covering some of those costs for you. And third, just the prospect of NATO as an alliance and the deterrence value that that creates with Russia, with China, with Iran is unmatched elsewhere in the world. No one else has that many allies that they can draw upon.

Right, how about that? In our remaining moment, I suspect that the Secretary of General will make the case to Donald Trump that if Ukraine falls, it is more dangerous, it is more expensive to exist as NATO.

Right, how about that? In our remaining moment, I suspect that the Secretary of General will make the case to Donald Trump that if Ukraine falls, it is more dangerous, it is more expensive to exist as NATO.

That would be the argument I would certainly make, and I think in particular when you think about it from Russia's perspective, if Ukraine falls, what are its next targets?

That would be the argument I would certainly make, and I think in particular when you think about it from Russia's perspective, if Ukraine falls, what are its next targets?

It's probably the bult.

It's probably the bult.

Poland's on the front door of pactics are standing right there waiting for you. Estonia is listening closely to this conversation today, isn't it?

Poland's on the front door of pactics are standing right there waiting for you. Estonia is listening closely to this conversation today, isn't it?

Yeah?

Yeah?

Estonia, Lithuania, you know, Poland, Latvia, They're all going to be watching very closely.

Estonia, Lithuania, you know, Poland, Latvia, They're all going to be watching very closely.

There's a lot on the line here. Stakes are high, and that's usually when we bring in Jenny Welch Thank you so much, Jenny. It's a great conversation as always Bloomberg Economics. Find Jenny's byline on the terminal and online, of course, at Bloomberg dot Com. I'm Joe, Matthew and Washington. We thank you for being with us here on the Thursday edition as we plow ahead with what's happening on the other end of Pennsylvania Avenue. We will bring you into the old for that conversation when it happens later on. But of course we've got to talk about a government shutdown potentially now in two days after Chuck Schumer said Democrats will not play along in the Upper Chamber. Do we believe them? We'll talk about this and what the economic impact could be with Tazra Mitchell coming up next. Right here on Bloomberg.

There's a lot on the line here. Stakes are high, and that's usually when we bring in Jenny Welch Thank you so much, Jenny. It's a great conversation as always Bloomberg Economics. Find Jenny's byline on the terminal and online, of course, at Bloomberg dot Com. I'm Joe, Matthew and Washington. We thank you for being with us here on the Thursday edition as we plow ahead with what's happening on the other end of Pennsylvania Avenue. We will bring you into the old for that conversation when it happens later on. But of course we've got to talk about a government shutdown potentially now in two days after Chuck Schumer said Democrats will not play along in the Upper Chamber. Do we believe them? We'll talk about this and what the economic impact could be with Tazra Mitchell coming up next. Right here on Bloomberg.

You're listening to the bloom Work Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Apple, Cocklay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa play Bloomberg eleven thirty.

You're listening to the bloom Work Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Apple, Cocklay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa play Bloomberg eleven thirty.

Thank you for being with us here on Bloomberg Radio on the satellite radio Channel one twenty one and on YouTube search Bloomberg Business News Live. That's the drill. Find our live stream. Just keep it up running there all day. You can listen, you can watch, you can back it up. And we always welcome you saving your seat here in the studio in Washington. I'm Joe Matthew. It's good to have you along here as we've tried to follow the bouncing ball on Capitol Hill all the while keeping tabs on the White House. The President today meeting with the NATO Secretary General in the Oval. It could get chippy. Will bring you in there when they get in there. But you know, not a lot of things in Washington happened on time. That could be the case. By the way, for a vote on a bill to avoid a government shutdown, are they going to get this done? Maybe not. Things have become a lot more complicated over the past twenty four hours. Here. John Thune did file cloture. The Senate majority leader on this House pasted cr the one we've been talking about last night. That means a cloture vote Friday. But wait, you say government's supposed to shut down Friday night. Gets a little complicated when Chuck Schumer says Democrats are not going to vote yes for this thing, and that may not be the case in the end, but we've got a roadblock right now on the Democratic side. So a time agreement would be necessary to avoid at least a shutdown over the weekend, which might not be that big of a deal. The problem is, as Democrats watched the Doge do its work, there's a big question about what would happen if the government actually was allowed to shut down. What would reopen? Maybe entire agencies would remain shut down, certainly during the span of the closure. Donald Trump would be able to make those decisions. And we've talked about this before on the air with a lot of people who know a lot more about this than I do. The fact of the matter, as presidents enjoy broad powers in spending discretion during a government shutdown, right We've talked about this with Mick mulvaney along with a lot of other people. The Office of Management and Budget is in charge at that point, and they start using the money they have to operate the agencies they have, So park that right here as Democrats think about maybe voting no on this and then consider what's about to happen to d C, the District of Columbia, the federal city. You come here, you hang around, go to the Smithsonian, enjoy time with your family. Look at the cherry blossoms every spring. Well, real people actually live here, and of course they do not get a vote in Congress. That's where things get complicated because this budget plan, this stop gap, the way it's written, basically turns DC into a federal agency and dramatically cut suspending to the tune of like a billion dollars. Which is why we're already hearing threats by the mayor, not threats, warnings that hey, we may need to start firing teachers and police officers if this goes through. This is one of the reasons why Democrats say they want to vote no. Nobody put a finer point on this than Brad Howard, the Democratic strategist. You hear about a lot here or here from a lot on Balance of Power. He was on the late edition from Corkorann Street Group. Here's what he said.

Thank you for being with us here on Bloomberg Radio on the satellite radio Channel one twenty one and on YouTube search Bloomberg Business News Live. That's the drill. Find our live stream. Just keep it up running there all day. You can listen, you can watch, you can back it up. And we always welcome you saving your seat here in the studio in Washington. I'm Joe Matthew. It's good to have you along here as we've tried to follow the bouncing ball on Capitol Hill all the while keeping tabs on the White House. The President today meeting with the NATO Secretary General in the Oval. It could get chippy. Will bring you in there when they get in there. But you know, not a lot of things in Washington happened on time. That could be the case. By the way, for a vote on a bill to avoid a government shutdown, are they going to get this done? Maybe not. Things have become a lot more complicated over the past twenty four hours. Here. John Thune did file cloture. The Senate majority leader on this House pasted cr the one we've been talking about last night. That means a cloture vote Friday. But wait, you say government's supposed to shut down Friday night. Gets a little complicated when Chuck Schumer says Democrats are not going to vote yes for this thing, and that may not be the case in the end, but we've got a roadblock right now on the Democratic side. So a time agreement would be necessary to avoid at least a shutdown over the weekend, which might not be that big of a deal. The problem is, as Democrats watched the Doge do its work, there's a big question about what would happen if the government actually was allowed to shut down. What would reopen? Maybe entire agencies would remain shut down, certainly during the span of the closure. Donald Trump would be able to make those decisions. And we've talked about this before on the air with a lot of people who know a lot more about this than I do. The fact of the matter, as presidents enjoy broad powers in spending discretion during a government shutdown, right We've talked about this with Mick mulvaney along with a lot of other people. The Office of Management and Budget is in charge at that point, and they start using the money they have to operate the agencies they have, So park that right here as Democrats think about maybe voting no on this and then consider what's about to happen to d C, the District of Columbia, the federal city. You come here, you hang around, go to the Smithsonian, enjoy time with your family. Look at the cherry blossoms every spring. Well, real people actually live here, and of course they do not get a vote in Congress. That's where things get complicated because this budget plan, this stop gap, the way it's written, basically turns DC into a federal agency and dramatically cut suspending to the tune of like a billion dollars. Which is why we're already hearing threats by the mayor, not threats, warnings that hey, we may need to start firing teachers and police officers if this goes through. This is one of the reasons why Democrats say they want to vote no. Nobody put a finer point on this than Brad Howard, the Democratic strategist. You hear about a lot here or here from a lot on Balance of Power. He was on the late edition from Corkorann Street Group. Here's what he said.

This money, they can't be used, this money to calculate savings. This money can't be used for the federal government.

This money, they can't be used, this money to calculate savings. This money can't be used for the federal government.

It is our money.

It is our money.

Essentially, what does it gets diverted away from us for six months and then they figure out later what happens. So it doesn't even calculate savings. So we're trying to figure out what happened here why. It just seems hopefully it's not just a mean spirited attempt to thumber knows at a democratic jurisdiction. But I don't know how else to read it.

Essentially, what does it gets diverted away from us for six months and then they figure out later what happens. So it doesn't even calculate savings. So we're trying to figure out what happened here why. It just seems hopefully it's not just a mean spirited attempt to thumber knows at a democratic jurisdiction. But I don't know how else to read it.

So wait a minute. This money is from people who live in the District of Columbia and it's going to go somewhere else. That's what Brad is saying, and that's the prospect we're looking at. If you're listening to us right now on ninety nine to one in Washington, d C, you probably know this. And what they're saying is, Hey, make that happen. You get an instant recession in DC and right around the whole DMV, Yes, the DMV district Maryland, Virginia said to be recession proof. This is what Tazra Mitchell has been working on. She's Chief Policy and strategy Officer at the DC Fiscal Policy Institute, Where Tasra, I'm guessing the house is on fire. Is this really about to happen?

So wait a minute. This money is from people who live in the District of Columbia and it's going to go somewhere else. That's what Brad is saying, and that's the prospect we're looking at. If you're listening to us right now on ninety nine to one in Washington, d C, you probably know this. And what they're saying is, Hey, make that happen. You get an instant recession in DC and right around the whole DMV, Yes, the DMV district Maryland, Virginia said to be recession proof. This is what Tazra Mitchell has been working on. She's Chief Policy and strategy Officer at the DC Fiscal Policy Institute, Where Tasra, I'm guessing the house is on fire. Is this really about to happen?

Well, we hope that the Senate Democrats will ensure that DC gets suspend its own money. This extreme act of federal interference will negatively impact basic government services that we all rely on, from childcare to nine one one, touching every DC resident, and we are really leaning on them to prevent us from going into place.

Well, we hope that the Senate Democrats will ensure that DC gets suspend its own money. This extreme act of federal interference will negatively impact basic government services that we all rely on, from childcare to nine one one, touching every DC resident, and we are really leaning on them to prevent us from going into place.

What can be done other than Democrats voting now?

What can be done other than Democrats voting now?

So, unfortunately DC lacks the power of statehood. We should have it, but we do not, so we are subject to Congressional review of all of our legislation, including our our own budget. DC has had a balanced budget for twenty eight consecutive years with clean audits. Unlike the federal government, we have to balance our budget. We have these one billion dollars in revenues, and all we really need is for Congress to let us spend our money the way that we see fit and give us the same autonomy that localities across the country have. So what we're asking them to do is to ensure that whatever continuing resolution that goes through allows DC to spend its own resources as we see fit, including sticking with twenty twenty five current budget levels, because if they fail to do that, we're going to see layoffs of police, layoffs of firefighters, teachers, all of our workers that help run our city and keep us safe, which I think should be a top priority for both Republicans and Senate Democrats.

So, unfortunately DC lacks the power of statehood. We should have it, but we do not, so we are subject to Congressional review of all of our legislation, including our our own budget. DC has had a balanced budget for twenty eight consecutive years with clean audits. Unlike the federal government, we have to balance our budget. We have these one billion dollars in revenues, and all we really need is for Congress to let us spend our money the way that we see fit and give us the same autonomy that localities across the country have. So what we're asking them to do is to ensure that whatever continuing resolution that goes through allows DC to spend its own resources as we see fit, including sticking with twenty twenty five current budget levels, because if they fail to do that, we're going to see layoffs of police, layoffs of firefighters, teachers, all of our workers that help run our city and keep us safe, which I think should be a top priority for both Republicans and Senate Democrats.

So it's important what you just said here, this is money that is actually raised from people who live in the districts of Columbia, or that it's not coming from Kansas, California, or Connecticut. Is the point here, right, So if it's money from the city, you're saying it should stay in the city. The problem is DC doesn't have a vote, which is why since the year two thousand, if you ever look at the license plate in Washington, DC, it says taxation without representation. It brings up the whole argument over home rule here, Tazra. And this could end up being a pretty difficult period for the district. Would it cause a recession?

So it's important what you just said here, this is money that is actually raised from people who live in the districts of Columbia, or that it's not coming from Kansas, California, or Connecticut. Is the point here, right, So if it's money from the city, you're saying it should stay in the city. The problem is DC doesn't have a vote, which is why since the year two thousand, if you ever look at the license plate in Washington, DC, it says taxation without representation. It brings up the whole argument over home rule here, Tazra. And this could end up being a pretty difficult period for the district. Would it cause a recession?

It could very.

It could very.

Well cause our We're already actually projected to face a mob recession in the district because of Trump's federal layoffs. Our own chief financial officer is already saying that our revenues are going to plummet by a billion dollars over the next four years just because of federal layoffs alone. And now we have this additional billion dollar problem that would harm our economy, small businesses, and make it harder for everyday district residents to make ends meet. And as you said earlier in the cliff, this will have have repel effects on the entire region. So Maryland and Virginian residents. Virginia residents will also be harmed by this reckless and dramatic escalation among Republicans in Congress.

Well cause our We're already actually projected to face a mob recession in the district because of Trump's federal layoffs. Our own chief financial officer is already saying that our revenues are going to plummet by a billion dollars over the next four years just because of federal layoffs alone. And now we have this additional billion dollar problem that would harm our economy, small businesses, and make it harder for everyday district residents to make ends meet. And as you said earlier in the cliff, this will have have repel effects on the entire region. So Maryland and Virginian residents. Virginia residents will also be harmed by this reckless and dramatic escalation among Republicans in Congress.

It's unnecessary function.

It's unnecessary function.

Ye, that's right. How does the city function if you fire teachers police? You can't have nine to one to one on the rest of it. What we're going to live in mad Max for the next couple of years.

Ye, that's right. How does the city function if you fire teachers police? You can't have nine to one to one on the rest of it. What we're going to live in mad Max for the next couple of years.

Well, this is unprecedented. I think the mayor would have really hard choices to make that are forced upon her something that she does not want to do. You know, she said that we would have to cut a billion dollars through September. That is about a sixteen percent cut in our budget. That means probably thousands of fewer government workers that are keeping our streets clean, that are educating our children, that are making it safe for tours to come and visit our great city. Just so many reppel effects. And you know there are also looming federal cuts that are that may also be coming our way that would make it harder to put food on the table, care for children, you know, just afford to live in the district. And again, this is unnecessary. We have the revenue and the bank. We are not projected to face a deficit. This is just reckless. This is an overreach and again just an attack on DC residents' rights as Americans in this nation.

Well, this is unprecedented. I think the mayor would have really hard choices to make that are forced upon her something that she does not want to do. You know, she said that we would have to cut a billion dollars through September. That is about a sixteen percent cut in our budget. That means probably thousands of fewer government workers that are keeping our streets clean, that are educating our children, that are making it safe for tours to come and visit our great city. Just so many reppel effects. And you know there are also looming federal cuts that are that may also be coming our way that would make it harder to put food on the table, care for children, you know, just afford to live in the district. And again, this is unnecessary. We have the revenue and the bank. We are not projected to face a deficit. This is just reckless. This is an overreach and again just an attack on DC residents' rights as Americans in this nation.

Well, there's a bit too that, Tazra, and I'm sure that you can speak to the kind of resentment. Maybe we'll start with the misunderstanding that people have around the country of what DC is, who lives here, who's from here. They picture this massive bureaucracy, a bunch of guys with white shirts and skinny ties. They're not aware that there is in fact a native community here in this city, that things other than the federal government take place here. But there's some truth to this resentments that people have to DC, or sort of a lack of caring. I think some people actually enjoy watching this, do you know?

Well, there's a bit too that, Tazra, and I'm sure that you can speak to the kind of resentment. Maybe we'll start with the misunderstanding that people have around the country of what DC is, who lives here, who's from here. They picture this massive bureaucracy, a bunch of guys with white shirts and skinny ties. They're not aware that there is in fact a native community here in this city, that things other than the federal government take place here. But there's some truth to this resentments that people have to DC, or sort of a lack of caring. I think some people actually enjoy watching this, do you know?

I think that d C has a rich culture.

I think that d C has a rich culture.

Go Go was born here.

Go Go was born here.

We have great food, we have great community, and it's just like anywhere else in the nation. We we raise our children here, we look out for one another, and we're doing our best to get by. And the last thing that we need is Congression, the Congressional delegation. We really probably don't even know DC all that well, and explore the beauty of our culture coming in and making demands without having an ounce of understanding about how we run the district or how we you know, like what our finances are used for. Again, we twenty eight years in a row, we've had clean audits, and for over twenty years, Congress has made the agreement with DC to let us spend our money as we see fit and part tact us during shutdowns and protect us during continuing resolutions. It cost them zero dollars to continue that promise as they pass this continuing resolution. And just today and yesterday you're seeing hundreds of residents going down to the Senate building and making their voices heard, and we hope that Senate Democrats are listening to them as well as other Senate Republicans. Again, it will not save them a single penny, it will not cost them anything. They just have to understand the suffering that they are going to be causing on their neighboring residents in the district and again for no real reason.

We have great food, we have great community, and it's just like anywhere else in the nation. We we raise our children here, we look out for one another, and we're doing our best to get by. And the last thing that we need is Congression, the Congressional delegation. We really probably don't even know DC all that well, and explore the beauty of our culture coming in and making demands without having an ounce of understanding about how we run the district or how we you know, like what our finances are used for. Again, we twenty eight years in a row, we've had clean audits, and for over twenty years, Congress has made the agreement with DC to let us spend our money as we see fit and part tact us during shutdowns and protect us during continuing resolutions. It cost them zero dollars to continue that promise as they pass this continuing resolution. And just today and yesterday you're seeing hundreds of residents going down to the Senate building and making their voices heard, and we hope that Senate Democrats are listening to them as well as other Senate Republicans. Again, it will not save them a single penny, it will not cost them anything. They just have to understand the suffering that they are going to be causing on their neighboring residents in the district and again for no real reason.

Yeah, you know, as Brad Howard pointed out last night, a lot of the DC populations made up of congressional staffers, the people who work for the lawmakers who are going to be voting on this thing. Lawmakers may fly back to another state on the weekends, but these people live here. They're chiefs of staff right on down to the pages on Capitol Hill. So this actually hits pretty close to home to the families that they have in their own offices. And I'd be deeply curious to hear what some of those conversations are. Like, Tasra, I'm really glad you could join us, and I appreciate your insights today. Tasra Mitchell, chief policy strategy Officer at the DC Fiscal Policy Institute. Yeah, we're in the bubble here, but this has repercussions certainly regionally. If we talk about the beginnings of a recession nationally, could it be rooted here in Washington. It's a different story than we've probably told in the past. They've started their conversation in the Oval Office, and as usual, you know, the drill around here will bring you in for the conversation a bit later between President Trump and NATO Secretary General Ruda. I also want to mention an important conversation we're going to bring you right here on Balance of Power half an hour from right now, the former Treasury Secretary Steve Manuchen sitting down with our own Salaia Mosen here on Bloomberg. We'll set up our panel next their insights on everything we're talking about. Jenny Shanzano and Lester Munson are on the way in.

Yeah, you know, as Brad Howard pointed out last night, a lot of the DC populations made up of congressional staffers, the people who work for the lawmakers who are going to be voting on this thing. Lawmakers may fly back to another state on the weekends, but these people live here. They're chiefs of staff right on down to the pages on Capitol Hill. So this actually hits pretty close to home to the families that they have in their own offices. And I'd be deeply curious to hear what some of those conversations are. Like, Tasra, I'm really glad you could join us, and I appreciate your insights today. Tasra Mitchell, chief policy strategy Officer at the DC Fiscal Policy Institute. Yeah, we're in the bubble here, but this has repercussions certainly regionally. If we talk about the beginnings of a recession nationally, could it be rooted here in Washington. It's a different story than we've probably told in the past. They've started their conversation in the Oval Office, and as usual, you know, the drill around here will bring you in for the conversation a bit later between President Trump and NATO Secretary General Ruda. I also want to mention an important conversation we're going to bring you right here on Balance of Power half an hour from right now, the former Treasury Secretary Steve Manuchen sitting down with our own Salaia Mosen here on Bloomberg. We'll set up our panel next their insights on everything we're talking about. Jenny Shanzano and Lester Munson are on the way in.

Right here on Bloomberg, you're listening to the Blue Work Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Apple Coarclay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

Right here on Bloomberg, you're listening to the Blue Work Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Apple Coarclay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

On the Thursday edition. Yeah, it's Little Friday, and we've got our arms stretched around Washington here with activity on both ends of Pennsylvania Avenue that require your attention here. As Charlie mentioned, we're going to have to start warming up to the California Pino and cab all over again because the wine from the other side of the Atlantic may be about to get a lot more expensive two hundred percent terriffs.

On the Thursday edition. Yeah, it's Little Friday, and we've got our arms stretched around Washington here with activity on both ends of Pennsylvania Avenue that require your attention here. As Charlie mentioned, we're going to have to start warming up to the California Pino and cab all over again because the wine from the other side of the Atlantic may be about to get a lot more expensive two hundred percent terriffs.

As the president.

As the president.

On your Kianti, you're Brunello de Montalcino. You're faquarashigunda and shots enough to pop. So hey, look at the bright side. There's a meeting tomorrow, as we just heard, Trump White House meeting with the EU Trade Commissioner magically on Friday, knowing that reciprocal tariffs are set to take effect on April second. This is all going to be part of a special conversation that we have coming up for you in about twenty minutes time with the former Treasury Secretary Steve Manucin. You'll hear it live right here on Bloomberg TV and Radio. In the meantime, we're watching the process unfold on Capitol Hill that what we have been told on a daily basis would not result in a government shutdown. Now we're told the odds are rising on a shutdown. We're gonna have to bump into Nathan Deane and see where a BI is on this, because things got a lot more complicated late yesterday. Chuck Schumer says Democrats are not playing ball, and a lot of it has to do with the conversation that we just had with Tazra Mitchell. The cuts that are happening here in Washington, d C. The District of Columbia, as well as the DOGE cuts at large. In many cases, the White House not spending money that was allocated and passed by Congress. So Chuck Schumer says Democrats have had it here he is from last night.

On your Kianti, you're Brunello de Montalcino. You're faquarashigunda and shots enough to pop. So hey, look at the bright side. There's a meeting tomorrow, as we just heard, Trump White House meeting with the EU Trade Commissioner magically on Friday, knowing that reciprocal tariffs are set to take effect on April second. This is all going to be part of a special conversation that we have coming up for you in about twenty minutes time with the former Treasury Secretary Steve Manucin. You'll hear it live right here on Bloomberg TV and Radio. In the meantime, we're watching the process unfold on Capitol Hill that what we have been told on a daily basis would not result in a government shutdown. Now we're told the odds are rising on a shutdown. We're gonna have to bump into Nathan Deane and see where a BI is on this, because things got a lot more complicated late yesterday. Chuck Schumer says Democrats are not playing ball, and a lot of it has to do with the conversation that we just had with Tazra Mitchell. The cuts that are happening here in Washington, d C. The District of Columbia, as well as the DOGE cuts at large. In many cases, the White House not spending money that was allocated and passed by Congress. So Chuck Schumer says Democrats have had it here he is from last night.

Funding the government should be a bypart is an effort, but Republicans chose a partisan path, drafting their Continuing Resolution without any input, any input from Congressional Democrats. Because of that, Republicans do not have the votes in the Senate to invoke cloture on the House cr.

Funding the government should be a bypart is an effort, but Republicans chose a partisan path, drafting their Continuing Resolution without any input, any input from Congressional Democrats. Because of that, Republicans do not have the votes in the Senate to invoke cloture on the House cr.

Yeah, the math is tough. John Thune, who filed for cloture last night and has an actual cloture vote scheduled for tomorrow, needs at least at least seven Democrats to make this work. We're watching you, Ran Paul, as well as our panel. Genie Shanzano is with us right now, our Democratic strategist of course, Bloomberg Politics contributor and senior Democracy Fellow for the Center of the Study of the Presidency in Congress, and great to have Lester back. He's been around the world since We've last spoke Lester months in principle of the international practice at BGR group are Republican strategists. Great to see both of you here, Genie, is this real Democrats gonna sit on their hands this weekend?

Yeah, the math is tough. John Thune, who filed for cloture last night and has an actual cloture vote scheduled for tomorrow, needs at least at least seven Democrats to make this work. We're watching you, Ran Paul, as well as our panel. Genie Shanzano is with us right now, our Democratic strategist of course, Bloomberg Politics contributor and senior Democracy Fellow for the Center of the Study of the Presidency in Congress, and great to have Lester back. He's been around the world since We've last spoke Lester months in principle of the international practice at BGR group are Republican strategists. Great to see both of you here, Genie, is this real Democrats gonna sit on their hands this weekend?

I don't know.

I don't know.

I have to say, I hope not. I mean, this is the Hobson's choice of all time for the Democrats. There is no good option. So I am empathetic to the position they find themselves in. They refeel strongly that this is a chance to push back on what is happening with DOJE and you just talked about this, what the president is doing and all of that, and obviously they're out of power, so they don't get a lot of opportunities.

I have to say, I hope not. I mean, this is the Hobson's choice of all time for the Democrats. There is no good option. So I am empathetic to the position they find themselves in. They refeel strongly that this is a chance to push back on what is happening with DOJE and you just talked about this, what the president is doing and all of that, and obviously they're out of power, so they don't get a lot of opportunities.

But that said, I'm hoping they.

But that said, I'm hoping they.

Resist the temptation because shutting down the government now would be a political win for Donald Trump and a disaster for Democrats because there's nothing at the back end for them, particularly this ridiculousness of a thirty day cr So I hope they resist the temptation. I'm not sure they're going to be able to do that because they are so frustrated.

Resist the temptation because shutting down the government now would be a political win for Donald Trump and a disaster for Democrats because there's nothing at the back end for them, particularly this ridiculousness of a thirty day cr So I hope they resist the temptation. I'm not sure they're going to be able to do that because they are so frustrated.

As usual, Genie reaches for the news. This is what's going on here. Democrats are going to put up an amendment their own CR proposal that would extend government funding through April eleventh. That'd be the one month CR here. Lester, I know that you have a sense of humor. Is this a joke here or are we talking about a government shutdown?

As usual, Genie reaches for the news. This is what's going on here. Democrats are going to put up an amendment their own CR proposal that would extend government funding through April eleventh. That'd be the one month CR here. Lester, I know that you have a sense of humor. Is this a joke here or are we talking about a government shutdown?

I don't think it's a joke, although Janie's comments, Wow, I didn't.

I don't think it's a joke, although Janie's comments, Wow, I didn't.

I think that.

I think that.

I think the thirty the thirty day extension is a is not a joke. It's an interesting option for Democrats. And you know what I'm what I'm hearing from my sources up on the hill, particularly with that crowd, is they may they want to not give Trump a win here, but they when push comes to shove on the actual vote, they don't want to be the ones who are closing the government. And so so I think I'm I'm right where Genie is. I think you what you could see here is an interesting sequencing of the votes for Democrats. One of the things Republicans could do for them is, all right, we'll give you a little vote here to show that you don't don't really want the full year. You can vote on a thirty day, but then we're after that, we're going to vote on the full extension of the CR for the rest of the fiscal year, and we're going to need you to vote yet, at least a few of you to vote yes on that, and that might be a nice way out of the wilderness here for everybody.

I think the thirty the thirty day extension is a is not a joke. It's an interesting option for Democrats. And you know what I'm what I'm hearing from my sources up on the hill, particularly with that crowd, is they may they want to not give Trump a win here, but they when push comes to shove on the actual vote, they don't want to be the ones who are closing the government. And so so I think I'm I'm right where Genie is. I think you what you could see here is an interesting sequencing of the votes for Democrats. One of the things Republicans could do for them is, all right, we'll give you a little vote here to show that you don't don't really want the full year. You can vote on a thirty day, but then we're after that, we're going to vote on the full extension of the CR for the rest of the fiscal year, and we're going to need you to vote yet, at least a few of you to vote yes on that, and that might be a nice way out of the wilderness here for everybody.

Did you just put up a countdown clock, James, if you're with us on YouTube, Genie does a countdown clock in front of you?

Did you just put up a countdown clock, James, if you're with us on YouTube, Genie does a countdown clock in front of you?

Now?

Now?

Are we the first to get the countdown clock? You know what that means? We're really going to have to get odds on this thing, Jeanie. Look at this right now, they're counting down to a government shutdown. If it happens over the weekend, it's not real, right. If this is like a two day thing and they get it back together by Monday, what qualifies as a shutdown? And I ask you that knowing that a lot of Democrats believe if the government shuts down, many agencies will never reopen as long as Elon Musk is in town.

Are we the first to get the countdown clock? You know what that means? We're really going to have to get odds on this thing, Jeanie. Look at this right now, they're counting down to a government shutdown. If it happens over the weekend, it's not real, right. If this is like a two day thing and they get it back together by Monday, what qualifies as a shutdown? And I ask you that knowing that a lot of Democrats believe if the government shuts down, many agencies will never reopen as long as Elon Musk is in town.

Well, that's right.

Well, that's right.

First of all, how great it is when producer James is in New York and he can put up countdown clocks off these cools.

First of all, how great it is when producer James is in New York and he can put up countdown clocks off these cools.

I love it.

I love it.

You know there is a chance we do see and we've always talked about this a very minimal, short term shut down. Now obviously it has impact, it's not quite as broad as if we saw a huge one.

You know there is a chance we do see and we've always talked about this a very minimal, short term shut down. Now obviously it has impact, it's not quite as broad as if we saw a huge one.

You know.

You know.

The reality though, is this is why this is a Hobson's choice for Democrats if they shut down the government. And I'm not just talking politically. Of course, they'll be blamed by the Trump administration what's new, But the reality is they're giving those exactly what they want. And this is one of the things we heard from Hickenlooper and others saying, and you just talked about this, Joe, then he gets to do what he wants to do. He's going to decide what's essential and so, which really means Elon Musk will be doing it with him. So from so many perspective, this is not good strategy, is not good governing, It is not good politics.

The reality though, is this is why this is a Hobson's choice for Democrats if they shut down the government. And I'm not just talking politically. Of course, they'll be blamed by the Trump administration what's new, But the reality is they're giving those exactly what they want. And this is one of the things we heard from Hickenlooper and others saying, and you just talked about this, Joe, then he gets to do what he wants to do. He's going to decide what's essential and so, which really means Elon Musk will be doing it with him. So from so many perspective, this is not good strategy, is not good governing, It is not good politics.

And boy, oh boy, it's so fun.

And boy, oh boy, it's so fun.

To be on with Lester, but can he please agree with me that that vote us described is the.

To be on with Lester, but can he please agree with me that that vote us described is the.

Epitome of political nonsense. Theater. We're going to give you a vote and we all know it's not going to pass. Wink wink wink. Then you cant this and then we go off for vacation.

Epitome of political nonsense. Theater. We're going to give you a vote and we all know it's not going to pass. Wink wink wink. Then you cant this and then we go off for vacation.

I mean, that is what is probably not going to satisfy anybody, including the Democratic base. So I don't know why they would do that, but they may very well do just what.

I mean, that is what is probably not going to satisfy anybody, including the Democratic base. So I don't know why they would do that, but they may very well do just what.

Lester's pull usit off the ledge Lester.

Lester's pull usit off the ledge Lester.

Any, Yeah, I don't.

Any, Yeah, I don't.

I don't know if you've noticed this or not, but there's a lot of theater happening in politics lately, and I think it's about time Democrats started to embrace the concept and fight on the same kind of battlefield that that Trump is on. Where's he's really running away with it. They need to figure out how to get up on get up there and do the same kind of rasthmotask and maybe you know this is this is a really nerdy thing to get out of this. But they need some sort of fig leaf, some way to show, hey, we're not really with this guy, but also we don't want to shut down the government. That I think people will understand a little bit. And if you need to do a little you know, two step on the floor of the Senate, that's okay with me.

I don't know if you've noticed this or not, but there's a lot of theater happening in politics lately, and I think it's about time Democrats started to embrace the concept and fight on the same kind of battlefield that that Trump is on. Where's he's really running away with it. They need to figure out how to get up on get up there and do the same kind of rasthmotask and maybe you know this is this is a really nerdy thing to get out of this. But they need some sort of fig leaf, some way to show, hey, we're not really with this guy, but also we don't want to shut down the government. That I think people will understand a little bit. And if you need to do a little you know, two step on the floor of the Senate, that's okay with me.

All right, we can do the Texas two step. We do have a little bit of breaking news. I need to mention here, Genie, this is important and it will be a big story as this develops later on today. Something you're going to hear a lot about federal agencies must rehire the probationary workers who were fired by the DOGE. This is coming from a federal judge in San Francisco ordering the Trump administration Bloomberg Laws the first to get to it to rehire thousands of the government's newest employees terminated in early February. Genie, these are the same people who are in many cases locked out of their computers, fired by email or voicemail, not allowed back in the building. This requires the VA Department of Energy, Interior, Agriculture, Treasury to rehire the fired employees. Once again, Genie, the court is the check on the administration.

All right, we can do the Texas two step. We do have a little bit of breaking news. I need to mention here, Genie, this is important and it will be a big story as this develops later on today. Something you're going to hear a lot about federal agencies must rehire the probationary workers who were fired by the DOGE. This is coming from a federal judge in San Francisco ordering the Trump administration Bloomberg Laws the first to get to it to rehire thousands of the government's newest employees terminated in early February. Genie, these are the same people who are in many cases locked out of their computers, fired by email or voicemail, not allowed back in the building. This requires the VA Department of Energy, Interior, Agriculture, Treasury to rehire the fired employees. Once again, Genie, the court is the check on the administration.

That's absolutely right.

That's absolutely right.

And you know, this has been the story of what we've seen so far with DOGE is they have just you know, gone with this chainsaw through cutting the people that they could as easily as they could with the probationary workers. Unfortunately, and then you have the court stepping in and saying that is you know, unconstitutional, illegal, They must be hired back. And you know, imagine if DOGE had been well prepared to do what we all need no needs to be done, which is to make smart cuts to these agencies, and to do it in a way that it increased efficiency, it increased responsiveness, it saved money. Instead to go and just cut people because they were the last hired makes no sense. I mean, all of us know it's not usually the last person who is hired who's not being effective. Sometimes it's the person who's been there for forty years who's not being effective. So that is no mark of getting rid of people who are inefficient. So from every perspective, this is such important news. And of course, to your point, the third branch stepping up to do what it needs to do, which is to hold the administration's feet to the fire when it comes to respecting the laws and the Constitution of the United States in doing its work.

And you know, this has been the story of what we've seen so far with DOGE is they have just you know, gone with this chainsaw through cutting the people that they could as easily as they could with the probationary workers. Unfortunately, and then you have the court stepping in and saying that is you know, unconstitutional, illegal, They must be hired back. And you know, imagine if DOGE had been well prepared to do what we all need no needs to be done, which is to make smart cuts to these agencies, and to do it in a way that it increased efficiency, it increased responsiveness, it saved money. Instead to go and just cut people because they were the last hired makes no sense. I mean, all of us know it's not usually the last person who is hired who's not being effective. Sometimes it's the person who's been there for forty years who's not being effective. So that is no mark of getting rid of people who are inefficient. So from every perspective, this is such important news. And of course, to your point, the third branch stepping up to do what it needs to do, which is to hold the administration's feet to the fire when it comes to respecting the laws and the Constitution of the United States in doing its work.

Leicester weighing on the ruling to the extent that you want to. But I'm kind of curious your reaction that we're seeing in the financial markets to all of the activities of the DOGE, combined with the confusion over tariffs. We're selling off again here. The SMP's down another one percent. The Nasdaq is down one and a half percent. We're getting closer to fifty five hundred on the S and P five hundred. I mean, we're beyond round tripping, as you know, to before election day. What do you make of this visceral reaction to the rhetoric out of Washington.

Leicester weighing on the ruling to the extent that you want to. But I'm kind of curious your reaction that we're seeing in the financial markets to all of the activities of the DOGE, combined with the confusion over tariffs. We're selling off again here. The SMP's down another one percent. The Nasdaq is down one and a half percent. We're getting closer to fifty five hundred on the S and P five hundred. I mean, we're beyond round tripping, as you know, to before election day. What do you make of this visceral reaction to the rhetoric out of Washington.

Well, I think we're I think we're seeing that little Trump bubble from late January early February popping and just after the election like so that's that's gone. I think this is largely about the tariffs and the confusion and the back and forth, the uncertainty. It's hard for businesses to plan. I mean, it's a crazy situation. I think to these to the to the Doge spending cuts issue, I have I have a different take here, I think than Genie.

Well, I think we're I think we're seeing that little Trump bubble from late January early February popping and just after the election like so that's that's gone. I think this is largely about the tariffs and the confusion and the back and forth, the uncertainty. It's hard for businesses to plan. I mean, it's a crazy situation. I think to these to the to the Doge spending cuts issue, I have I have a different take here, I think than Genie.

I think this is and I do hope I.

I think this is and I do hope I.

Think like she does that in the long run, there is an intelligent process here that is thought out and things about the things that we actually need to do and how we can do them in a more cost effective way.

Think like she does that in the long run, there is an intelligent process here that is thought out and things about the things that we actually need to do and how we can do them in a more cost effective way.

And that's good. That needs to happen.

And that's good. That needs to happen.

It's probably going to be led by Omb and Congress going forward, rather than than Dogetho Doge can.

It's probably going to be led by Omb and Congress going forward, rather than than Dogetho Doge can.

Play a role.

Play a role.

But I think what for the last few weeks with this, what the Doge process has done has enabled the President to get the cr through the House. It's distracted the Freedom Caucus, the real fiscal conservatives from the actual situation with respect to the budget. The Doge cuts don't actually result in any taxpayer savings. The money is still there that's going through basically keeps funding at a at a level you know, at a at a at a straight line going into the for the rest of the year, and even these budget resolutions that Congress is about to consider, what the reconciliation process, talk show discussionary spending not going down over time. So there's like the real risk for Trump here is the fiscal conservatives that they're going to bail out on his program, and he's using the Doge cuts.

But I think what for the last few weeks with this, what the Doge process has done has enabled the President to get the cr through the House. It's distracted the Freedom Caucus, the real fiscal conservatives from the actual situation with respect to the budget. The Doge cuts don't actually result in any taxpayer savings. The money is still there that's going through basically keeps funding at a at a level you know, at a at a at a straight line going into the for the rest of the year, and even these budget resolutions that Congress is about to consider, what the reconciliation process, talk show discussionary spending not going down over time. So there's like the real risk for Trump here is the fiscal conservatives that they're going to bail out on his program, and he's using the Doge cuts.

To kind of keep them on side.

To kind of keep them on side.

It's a little bit of a magic act where he's he's doing the Doge as kind of the distraction while on the while you're not looking on the other side, he's passing all these things through the Hill and getting Freedom Caucus to vote for him.

It's a little bit of a magic act where he's he's doing the Doge as kind of the distraction while on the while you're not looking on the other side, he's passing all these things through the Hill and getting Freedom Caucus to vote for him.

Yeah, we're going to keep doing the Doughe with laster months and Jeanie Shanzo. Our panel will stay with us in our second hour, and as I mentioned, we'll bring you a conversation about all of this with the former Treasury Secretary Stephen Minuchin is going to be sitting down with Bloomberg Salia Mosen right here in our studios in Washington. So stay with us as we welcome our global television audience to the common coming up as well here on the fastest show in politics.

Yeah, we're going to keep doing the Doughe with laster months and Jeanie Shanzo. Our panel will stay with us in our second hour, and as I mentioned, we'll bring you a conversation about all of this with the former Treasury Secretary Stephen Minuchin is going to be sitting down with Bloomberg Salia Mosen right here in our studios in Washington. So stay with us as we welcome our global television audience to the common coming up as well here on the fastest show in politics.

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

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

We bring you an important conversation as here in Washington, d C. The former US Treasury Secretary Steve Mnuchen is sitting down with our colleague Salia moson Sealia.

We bring you an important conversation as here in Washington, d C. The former US Treasury Secretary Steve Mnuchen is sitting down with our colleague Salia moson Sealia.

Thanks, Kaylie. We have Treasure Secretary Stephen Mnushan with us here. Thank you so much for joining.

Thanks, Kaylie. We have Treasure Secretary Stephen Mnushan with us here. Thank you so much for joining.

Thank you, it's great to be here with you.

Thank you, it's great to be here with you.

You have a unique insight into this administration because you served all four years during the first term for President Trump. I wonder what you make of a difference that we're seeing with Trump this time around. He is a little less concerned about day to day market swings. We've seen big tear of talk two hundred percent. He's twenty five percent, ten percent across the board, and the S and P five hundred has wiped out five trillion dollars in part because of this. What do you make in the shift in Trump's thinking about markets.

You have a unique insight into this administration because you served all four years during the first term for President Trump. I wonder what you make of a difference that we're seeing with Trump this time around. He is a little less concerned about day to day market swings. We've seen big tear of talk two hundred percent. He's twenty five percent, ten percent across the board, and the S and P five hundred has wiped out five trillion dollars in part because of this. What do you make in the shift in Trump's thinking about markets.

I think the execution is slightly different, but I think the fundamental economic policies are actually the same. And this goes back to what the President campaigned on in twenty sixteen. Tax cuts, regulatory relief, and trade, and those are the same things you're hearing about today. I would say it's critically important that the tax cuts are extended, and I know President Trump wants to add additional tax cuts. He's always been very focused on trade. I think that you're seeing a more aggressive trade policy in this administration, and I think one of the questions is does the President want to use this to negotiate or does he want to use this to raise tariff revenue, which he's talked about significantly which if he's going to do that and use that to create tax cuts or pay down debt, is an interesting strategy for effectively creating a consumption tax on foreign goods.

I think the execution is slightly different, but I think the fundamental economic policies are actually the same. And this goes back to what the President campaigned on in twenty sixteen. Tax cuts, regulatory relief, and trade, and those are the same things you're hearing about today. I would say it's critically important that the tax cuts are extended, and I know President Trump wants to add additional tax cuts. He's always been very focused on trade. I think that you're seeing a more aggressive trade policy in this administration, and I think one of the questions is does the President want to use this to negotiate or does he want to use this to raise tariff revenue, which he's talked about significantly which if he's going to do that and use that to create tax cuts or pay down debt, is an interesting strategy for effectively creating a consumption tax on foreign goods.

Do you think that some of the tariff threats pulling things back bringing them back up, Do you think that's a good policy.

Do you think that some of the tariff threats pulling things back bringing them back up, Do you think that's a good policy.

Well, I think the market is adjusting to his negotiating, which I think in the beginning the market thought that he wasn't serious about tariffs, despite the fact that I think and I've been saying, he's very serious about tariffs. So I've suggested that if he wants to raise revenue, a ten percent tariff across the board on everything would be very effective. They could score that as part of reconciliation, probably raise about two and a half trillion dollars, and that would be very effective in terms of creating tax cuts and paying down debt.

Well, I think the market is adjusting to his negotiating, which I think in the beginning the market thought that he wasn't serious about tariffs, despite the fact that I think and I've been saying, he's very serious about tariffs. So I've suggested that if he wants to raise revenue, a ten percent tariff across the board on everything would be very effective. They could score that as part of reconciliation, probably raise about two and a half trillion dollars, and that would be very effective in terms of creating tax cuts and paying down debt.

It's been a lot, though, for investors and business leaders and CEOs to absorb.

It's been a lot, though, for investors and business leaders and CEOs to absorb.

What's your What would your.

What's your What would your.

Advice be to some of this constituency as they try to deal with and they get worried about all the stock market gyrations from these tariff threats.

Advice be to some of this constituency as they try to deal with and they get worried about all the stock market gyrations from these tariff threats.

Well, my first advice would be, don't overreact. I know there's some talk about are we going to go into a recession. I don't see us at all going into a recession. I think we could have a little bit of a slowdown in the economy as we pull back on government spending, but I don't think investors should be concerned about a recession. The second thing I would say is we came in with the market being fully priced, so I think a five to ten percent correction on the S and P or the NASDAC actually makes sense.