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US, Iran Escalate Attacks as Fighting Around Strait Heats Up · Balance of Power

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  Speaker 1: Bloomberg Audio Studios.
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  Speaker 5: You're listening to the Bloomberg Balance of Power podcast. Catch
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  Speaker 6: Keeping an eye on the markets for us as we
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  Speaker 6: are seeing oil prices climb higher for a second day
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  Speaker 6: now after what was perhaps expected retaliation from the U.S.
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  Speaker 6: for Iran's retaliation, attempted retaliation against U.S. forces in Jordan.
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  Speaker 6: Central Command now says as of 12 p.m. Eastern, so
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  Speaker 6: just within the last hour, U.S. forces began striking Islamic
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  Speaker 6: Revolutionary Guard Corps targets in Iran. They say the strikes
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  Speaker 6: follow recent attempted attacks by the RGC against commercial shipping
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  Speaker 6: in the Strait of Hormuz and against American service members
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  Speaker 6: deployed to the region. Again, Joe, President Trump said yesterday
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  Speaker 6: a U.S. response was likely to come. The question is
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  Speaker 6: going to be. Does that end things here, or could
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  Speaker 6: we see this spiral into further escalation?
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  Speaker 7: Once again, it's a question we've been asking a lot lately,
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  Speaker 7: along with the markets, of course. And ahead of our
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  Speaker 7: conversation with Congressman Marlon Stutzman, we want to bring in
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  Speaker 7: Bloomberg White House correspondent Tyler Kendall, who's with us in
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  Speaker 7: studio today. Just for a quick read on what we know,
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  Speaker 7: because there's a lot of moving parts here at the
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  Speaker 7: White House today, Tyler. It's not only this resumption of strikes,
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  Speaker 7: but it's coinciding with a meeting with big oil executives
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  Speaker 7: less than a half an hour away. Do we have
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  Speaker 7: a sense of who's going to be there and what
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  Speaker 7: we're talking about?
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  Speaker 8: Well, we know that refiners from across the spectrum, small,
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  Speaker 8: large companies, have been invited to this meeting from the
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  Speaker 8: White House. That includes companies like Chevron, Delic Holdings, Marathon, Valero,
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  Speaker 8: some of those really bigger names that we know have
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  Speaker 8: been invited. engaging with this White House so far this
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  Speaker 8: term in a bid to get down prices, considering that
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  Speaker 8: President Trump has in part blamed the industry over alleged
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  Speaker 8: price gouging, has threatened that he's going to investigate them.
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  Speaker 8: Seems like this meeting will take a bit of a
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  Speaker 8: nicer tone. People familiar with the matter telling us that
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  Speaker 8: they're going to discuss market dynamics, how can they boost
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  Speaker 8: refining capacity here in the U.S. But of course, the
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  Speaker 8: latest news of these strikes is threatening the supply disruptions
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  Speaker 8: as we continue to see those prices trickle down to
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  Speaker 8: the consumer. Right now, we're hitting seasonal highs, national average
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  Speaker 8: for a gallon of gas. You guys probably have AAA up,
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  Speaker 8: but it's over $ 4 a gallon, which at this point
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  Speaker 8: in the season is pretty high as we head into
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  Speaker 8: Labor Day.
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  Speaker 6: On the strikes, Tyler, just quickly, should we understand that
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  Speaker 6: this is the U.S. response that President Trump promised? And
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  Speaker 6: what is the signal about whether or not the U.S.
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  Speaker 6: might be willing to strike again? Last time we saw
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  Speaker 6: this go tit for tat, it was, what, 10, 11
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  Speaker 6: days in a row that this went on?
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  Speaker 8: I was going to point out that we were expecting this, right?
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  Speaker 8: President Trump had telegraphed as much. We saw Iran target U.S.
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  Speaker 8: forces in Jordan and the UAE over the last few days.
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  Speaker 8: Where it goes from here, we'll have to see. Very clearly,
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  Speaker 8: the reporting is indicating that the U.S. is going after
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  Speaker 8: those targets around the Strait of Hormuz, likely hitting those
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  Speaker 8: rocket launchers that the U.S. says were intended to lay drones.
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  Speaker 8: After just last week, the U.S. had said that it
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  Speaker 8: had cleared drones and, excuse me, mines in the Strait
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  Speaker 8: and sort of drew that red line saying that the U.S.
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  Speaker 8: will go after any attempts by Iranian officials to remine
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  Speaker 8: the Strait because, of course, it all comes back to
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  Speaker 8: ensuring commercial shipping through the water.
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  Speaker 3: All right.
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  Speaker 6: Bloomberg Washington correspondent Tyler Kendall here with us in our Washington, D.C. studio.
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  Speaker 2: Thank you so much.
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  Speaker 6: Also back in Washington, of course, at least for a
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  Speaker 6: few days, is Republican Congressman Marlon Stutzman representing Indiana's 3rd District,
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  Speaker 6: who is joining us now live from Capitol Hill. Congressman,
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  Speaker 6: welcome back from recess. Welcome back to Bloomberg TV and radio.
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  Speaker 6: It's great to have you on the program, as always.
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  Speaker 6: There's much we want to discuss with you, but if
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  Speaker 6: we could begin with these resumed hostilities between the U.S.,
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  Speaker 6: and Iran. Do you have any expectation that this will
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  Speaker 6: be over by the time voters go to the polls
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  Speaker 6: in November? Are you now operating under the assumption that
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  Speaker 6: this will still be an active conflict, at least in
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  Speaker 6: some form, for the midterms?
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  Speaker 2: Joe, Kayleigh, great to see you both. You know what?
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  Speaker 9: I suspect that the Iranian regime is going to try
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  Speaker 9: to drag this out as long as they possibly can. And,
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  Speaker 9: you know, I think that what we see is that
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  Speaker 9: there is shipping moving through the Strait of Hormuz, which
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  Speaker 9: is positive.
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  Speaker 2: But at the same time, it's still a dangerous area,
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  Speaker 2: of course.
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  Speaker 9: And that the IRGC is going to continue to try
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  Speaker 9: to disrupt any chance they get to try to drag
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  Speaker 9: this out to hopefully disrupt our elections here in November.
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  Speaker 9: But also, I think what's interesting is that they have
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  Speaker 9: a little, I think they probably think they have a
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  Speaker 9: little breath of fresh air now that Putin has come
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  Speaker 9: out and said that he's going to stand with Tehran,
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  Speaker 9: which I think in the long run doesn't really make
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  Speaker 9: things that much more complicated because we already have our
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  Speaker 9: conflict with Russia and Ukraine, you know, with the sanctions
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  Speaker 9: bill here in Congress.
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  Speaker 2: That is about to be voted on.
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  Speaker 9: I think that that's probably what Putin is thinking is
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  Speaker 9: that he can maybe somehow scare some folks that maybe
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  Speaker 9: this becomes a much broader conflict. But I think in
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  Speaker 9: the long run, This is what we are going to win.
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  Speaker 9: And President Trump is doing the right thing by squeezing
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  Speaker 9: them not only economically, but using the military where he
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  Speaker 9: needs to.
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  Speaker 7: Is that right on the sanctions bill, Congressman? There's been
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  Speaker 7: a lot of reporting on this, that it's on ice,
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  Speaker 7: that it's DOA in the House. Will you actually see
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  Speaker 7: a vote, do you think, before you head back home?
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  Speaker 2: I don't know. It's going to be an interesting week.
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  Speaker 9: Of course, the CR is up this afternoon, the continuing
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  Speaker 9: resolution for the budget.
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  Speaker 2: I think that will pass. I would like to vote
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  Speaker 2: for it.
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  Speaker 9: I know that there's other colleagues that would like to,
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  Speaker 9: but there's some concern regarding the sanctions with Russia. But
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  Speaker 9: it passed with a strong vote out of the Senate.
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  Speaker 9: So I think it would send a strong message if
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  Speaker 9: we did pass it out of the House that we're
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  Speaker 9: all taking this very seriously.
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  Speaker 6: Well, on the continuing resolution, Congressman, this obviously would fund
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  Speaker 6: the government through December 11th. In the lame duck session,
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  Speaker 6: assuming that this passes today, I imagine that is indeed
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  Speaker 6: your assumption that the votes are there to make sure
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  Speaker 6: the lights don't turn off at the end of the
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  Speaker 6: fiscal year. Can we expect that regular appropriations bills will
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  Speaker 6: come out of this Congress, or are we going to
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  Speaker 6: have to wait until the next one takes office in January?
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  Speaker 9: Well, that was the discussion we had this morning in conference,
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  Speaker 9: is that, you know, the House, we could move through
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  Speaker 9: the appropriations bills. But so much of this is hung
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  Speaker 9: up in the Senate. And of course, the filibuster rule
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  Speaker 9: and the cloture vote is a big reason for that.
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  Speaker 9: But I still believe that a lot of this is
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  Speaker 9: going to come to fruition sooner or later. Obviously, the
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  Speaker 9: outcome of the election is a big piece of that.
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  Speaker 9: But we're all feeling very optimistic that Republicans can hold
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  Speaker 9: the House and the Senate. But it's going to take
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  Speaker 9: a lot of work especially with these 21 seats that
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  Speaker 9: are the swing seats across the country. Those candidates are
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  Speaker 9: anxious to be home campaigning. But we do have work
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  Speaker 9: to do. And I think that we have some time
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  Speaker 9: here to try to address those issues. Obviously, the Save
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  Speaker 9: America Act, which is a big issue for Republicans, probably
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  Speaker 9: doesn't clear the bar because we couldn't get it through
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  Speaker 9: the Senate.
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  Speaker 2: House passed it several times.
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  Speaker 9: But yeah, it's going to be a very busy lame
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  Speaker 9: duck session one way or the other.
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  Speaker 7: Bring us inside that. Republican conference meeting this morning. Politico
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  Speaker 7: was reporting that this would be an exercise to lay
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  Speaker 7: out new messaging targets for the rest of the cycle.
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  Speaker 7: A statement from Lisa McLean, of course, the chair of
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  Speaker 7: your conference, said one of the most aggressive and productive
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  Speaker 7: congresses since Harry Truman was president.
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  Speaker 1: Do you find that accurate, describing the 119th?
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  Speaker 9: Well, you look at the big, beautiful bill, and that alone,
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  Speaker 9: I sit on the Budget Committee and worked on that
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  Speaker 9: last year, and you could almost take those sections by sections,
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  Speaker 9: and those are big pieces of legislation. One of the
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  Speaker 9: things that I heard about a lot through the August
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  Speaker 9: recess back home as I traveled around my district, beef prices,
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  Speaker 9: of course, and President Trump has addressed that.
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  Speaker 2: We still have work to do in Congress. We've done
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  Speaker 2: it in the House.
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  Speaker 9: It's in the farm bill that's sitting in the Senate
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  Speaker 9: that would address and help the beef industry grow again.
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  Speaker 9: Of course, flock cameras is a big issue. And that
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  Speaker 9: seems to have bipartisan support to scale back and regulate
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  Speaker 9: flock cameras and.
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  Speaker 2: Then also data centers.
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  Speaker 9: So I think that those three issues alone shows that
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  Speaker 9: the economy is still growing.
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  Speaker 2: Strong gas prices.
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  Speaker 9: In Indiana, it's a little different where we have a
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  Speaker 9: balanced budget and surpluses. Our governor was able to suspend
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  Speaker 9: the gas tax for the last five months. So we're
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  Speaker 9: seeing much lower gas prices in Indiana. I know that's
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  Speaker 9: not the case in all states, but I still feel
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  Speaker 9: very strong going into the election that Republicans can hold
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  Speaker 9: the House and the Senate.
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  Speaker 2: So we do that.
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  Speaker 9: I think that going forward, we have a lot of
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  Speaker 9: work to do, which we know, but elections, of course,
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  Speaker 9: are in the middle of all of this.
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  Speaker 2: Well, indeed they are.
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  Speaker 6: And everything you just mentioned, we could spend five minutes on, Congressman.
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  Speaker 6: I'm going to pick what you said about beef and
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  Speaker 6: the president trying to address high beef prices. One way
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  Speaker 6: in which he's trying to do that is by lowering
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  Speaker 6: tariffs on imports. You've been for the American cattlemen cause,
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  Speaker 6: and I wonder how this really is sitting with those cattlemen,
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  Speaker 6: with ranchers and farmers in this country. Do they feel
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  Speaker 6: burned by the policy decisions this president is making right now?
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  Speaker 9: I think there was a lot of disappointment and maybe
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  Speaker 9: a little surprise that the tariffs were removed on Argentina beef.
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  Speaker 9: But at the same time, this has not been a
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  Speaker 9: crisis that just happened overnight. We've been pushing a lot
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  Speaker 9: of corn into the ethanol space. And so we've been driving,
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  Speaker 9: we've been trying to drive corn and soybean prices higher
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  Speaker 9: for row crop farmers. Well, that also increases the food
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  Speaker 9: cost when it comes to feeding out cattle and poultry
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  Speaker 9: and pork. So those costs have also been rising, and
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  Speaker 9: the economics are tough. I mean, my family's in the
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  Speaker 9: beef industry. as well as the poultry industry and feed
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  Speaker 9: prices are difficult. And with cattle, you know, you have
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  Speaker 9: a two year cycle and you have a lot of
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  Speaker 9: money wrapped up into one animal. by the time that
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  Speaker 9: it's ready for harvest. And so I think that the
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  Speaker 9: president made the right decision. I don't like that that's
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  Speaker 9: what it has to be, but what we really should
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  Speaker 9: focus on, and a lot of this is in the
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  Speaker 9: farm bill that the House passed, is passing country of
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  Speaker 9: origin labeling, making sure that every consumer knows where that
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  Speaker 9: beef comes from, that if it came from an American producer,
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  Speaker 9: it should say produced in the USA. If it comes
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  Speaker 9: from Argentina, it should say that. But also I think
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  Speaker 9: with the economics over the past several years, producers need
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  Speaker 9: some low-interest lending available to them to get the herd
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  Speaker 9: size back up to what we need to bring these
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  Speaker 9: prices back down. The herd size in the United States
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  Speaker 9: is as low as it's been in 70 years. So
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  Speaker 9: there's a lot of work that needs to be done,
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  Speaker 9: but in the interim, I think it's the right choice
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  Speaker 9: that President Trump made.
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  Speaker 7: Well, I know you're close to this story, Congressman. We've
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  Speaker 7: been talking to ranchers for the past week or so,
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  Speaker 7: and one thing that's been consistent is anger about Some
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  Speaker 7: of these decisions, including even Sid Miller, the Texas Ag Commissioner,
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  Speaker 7: who is MAGA through and through, described this as a
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  Speaker 7: reason not to vote MAGA for a lot of folks
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  Speaker 7: this midterm election season.
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  Speaker 1: Listen to Sid Miller. Again, he's the commissioner in Texas.
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  Speaker 7: We also talked to Will Harris, a fourth generation cattleman,
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  Speaker 7: White Oak Pastures.
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  Speaker 1: Listen to what they had to say. High feed because
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  Speaker 1: of the drought.
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  Speaker 10: High diesel prices because of the Strait of Hormuz, and
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  Speaker 10: the highest fertilizer prices I've ever paid, also because of
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  Speaker 10: the Strait of Hormuz. So we're not on easy times,
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  Speaker 10: and bringing in foreign beef is complicating the problem.
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  Speaker 4: I want to see wealthy people be able to eat beef,
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  Speaker 4: and I want to see poor people be able to
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  Speaker 4: eat beef. Beef is, as you pointed out earlier, is
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  Speaker 4: as high as it's ever been. My family's been on
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  Speaker 4: this farm since 1866, and beef has never been as
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  Speaker 4: high relative to other prices as it is right now.
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  Speaker 7: You can feel their pain, Congressman, and I really enjoyed
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  Speaker 7: getting to know both of them. How long will they
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  Speaker 7: have to put up with this? How long will consumers
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  Speaker 7: be seeing prices like this?
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  Speaker 9: Well, again, if the Argentina beef comes in, consumer prices
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  Speaker 9: are going to drop because there's going to be more
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  Speaker 9: supply at the meat counter. If that Argentina beef has
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  Speaker 9: tariffs on it, you're going to continue to see higher
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  Speaker 9: beef prices at the meat counter.
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  Speaker 2: It's a tough situation.
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  Speaker 9: But what I would say, and I had a corn
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  Speaker 9: growers meeting in Indiana during the break, and it was
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  Speaker 9: talking to farmers, and they're upset about it.
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  Speaker 2: But I said, hold on.
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  Speaker 9: I said, at the same time, you've got to remember
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  Speaker 9: what the Big Beautiful Bill did. We kept taxes low
• 12:48
  Speaker 9: for farmers. We increased the... inheritance tax cap that's going
• 12:52
  Speaker 9: to be good for farmers. The energy policy that President
• 12:56
  Speaker 9: Trump has been working on, that Republicans have been working on,
• 12:59
  Speaker 9: is going to increase supply in the long run. I
• 13:01
  Speaker 9: know that we want to see it fixed today, but
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  Speaker 9: at the same time, we've got to look out for consumers,
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  Speaker 9: but we also need to grow the herd size again.
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  Speaker 2: And so my proposal is.
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  Speaker 9: That USDA could do what they did during COVID, and
• 13:15
  Speaker 9: that's like an EIDL emergency loan program at a low
• 13:20
  Speaker 9: interest rate to help farmers get back and also producers.
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  Speaker 9: You know, there's four large producers that pretty much run 80%
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  Speaker 9: of the beef through their processing facilities. We need more
• 13:30
  Speaker 9: local and regional beef processors. So lending would be a
• 13:35
  Speaker 9: big help if they could get a low interest loan
• 13:37
  Speaker 9: to get back on track again.
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  Speaker 11: Okay.
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  Speaker 7: Well, it's good to have you back in the conversation, Congressman.
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  Speaker 7: We'll keep our eyes on that vote coming up on
• 13:44
  Speaker 7: the CR. And thank you for being with us here
• 13:47
  Speaker 7: on Balance of Power. Marlon Stutzman, the Republican from Indiana.
• 13:51
  Speaker 7: We should mention, Kayleigh, quickly a headline that crossed the
• 13:53
  Speaker 7: terminal just about an hour ago.
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  Speaker 1: The U.S.
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  Speaker 7: Will be making a beef labeling announcement. Consider the sourcing
• 14:00
  Speaker 7: that our ranchers were concerned about. You don't know what
• 14:02
  Speaker 7: country the beef is coming from. At some point this week,
• 14:05
  Speaker 7: Brooke Rollins, the Ag Secretary, making that announcement. Let's assemble
• 14:09
  Speaker 7: our political panel now that we've had a chance to
• 14:11
  Speaker 7: talk to the congressman, Bloomberg Politics contributors Jeanne Shanzano and
• 14:15
  Speaker 7: Rick Davis join us. Jeanne is our Democratic Analyst and
• 14:18
  Speaker 7: Democracy Visiting Fellow at Harvard Kennedy School's Ash Center. Rick
• 14:21
  Speaker 7: is our Republican Strategist and a partner at Stonecourt Capital. Rick,
• 14:25
  Speaker 7: I'm going to start with you because we just heard
• 14:27
  Speaker 7: from a Republican here and we're going to be speaking
• 14:29
  Speaker 7: with Madeline Dean to cross the aisle in just a
• 14:32
  Speaker 7: couple of moments. That conference meeting, I'm fascinated by it today,
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  Speaker 7: in which messaging targets were outlined for lawmakers who were
• 14:40
  Speaker 7: about to head home. I mentioned the line from Lisa McLean,
• 14:43
  Speaker 7: one of the most aggressive and productive Congresses since Truman.
• 14:46
  Speaker 7: I don't know how many people are going to go
• 14:48
  Speaker 7: along with that, but how do you frame these gas
• 14:52
  Speaker 7: prices and the beef prices and all of the other
• 14:56
  Speaker 7: challenges we've been discussing this hour when you talk to
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  Speaker 7: a voter?
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  Speaker 12: Yeah, it's a little surprising to me that we're back
• 15:03
  Speaker 12: trying to resell the big, beautiful bill. You know, we
• 15:06
  Speaker 12: talked at the time, wow, it's going to be really
• 15:08
  Speaker 12: hard for this administration if they don't sell this bill
• 15:12
  Speaker 12: because it's so controversial. You know, and there's sure something
• 15:15
  Speaker 12: in there for everybody, as the congressman pointed out. But
• 15:18
  Speaker 12: there's a lot of things that nobody wanted in that big,
• 15:20
  Speaker 12: beautiful bill. And so to hang your hat on going
• 15:24
  Speaker 12: back in time and saying, hey, we're going to tell
• 15:27
  Speaker 12: everybody about the big, beautiful bill again is going to
• 15:30
  Speaker 12: be an awful tough sell on the public. I mean,
• 15:33
  Speaker 12: this public has a pretty short attention span, and to
• 15:36
  Speaker 12: go back in time is going to be hard. Messaging
• 15:40
  Speaker 12: not exactly the contract for America that Newt Gingrich rolled
• 15:44
  Speaker 12: out right before the midterms that won a lot of seats.
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  Speaker 12: I guess, you know, the thing I was taken back
• 15:51
  Speaker 12: by Congressman Stutsman's conversation is The conversations he's been having
• 15:56
  Speaker 12: at home, right, doesn't sound like his town halls are
• 15:59
  Speaker 12: going particularly well when it came to talking about consumer prices.
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  Speaker 12: And he's gotten the message, but getting the administration to
• 16:06
  Speaker 12: get that message is, I think, the biggest problem for
• 16:09
  Speaker 12: Republican members in the heartland. He's got ideas on how
• 16:14
  Speaker 12: to fix the problem, but that's not what the White
• 16:16
  Speaker 12: House is doing. I mean, sure, loan programs after the election.
• 16:19
  Speaker 12: How hard is that going to be to sell to
• 16:21
  Speaker 12: your constituents?
• 16:23
  Speaker 1: So I don't know.
• 16:24
  Speaker 12: I mean, there was a level of frustration in his
• 16:27
  Speaker 12: voice that didn't indicate to me that he's particularly comfortable
• 16:30
  Speaker 12: with this election cycle.
• 16:33
  Speaker 6: Well, so, Jeannie, I'm sure as a Democrat, that makes
• 16:36
  Speaker 6: you feel a little more comfortable. But part of the
• 16:39
  Speaker 6: reason that ranchers are mad is because the president is
• 16:41
  Speaker 6: taking action to try to lower beef prices. Is this
• 16:45
  Speaker 6: not the pivot toward affordability that a lot of people
• 16:49
  Speaker 6: have been calling on the president to make for months now?
• 16:54
  Speaker 3: It is an attempt at that pivot. And I don't
• 16:57
  Speaker 3: think anybody, left, right or center, Democrat or Republican, should
• 17:02
  Speaker 3: be celebrating when people are suffering. So, you know, I
• 17:06
  Speaker 3: think that we do need to address the cost of living.
• 17:09
  Speaker 3: We do need to address consumer prices. We do need
• 17:12
  Speaker 3: to address the economy angst. And with this attempt, there
• 17:16
  Speaker 3: was an attempt by the president to do that potentially,
• 17:20
  Speaker 3: but it was not an attempt that was going to
• 17:23
  Speaker 3: yield the kind of full-throated end game that we would
• 17:29
  Speaker 3: hope for, which is that prices go down. Because we
• 17:33
  Speaker 3: have to remember, this is not just high prices in
• 17:37
  Speaker 3: one protein or one consumer product, say beef or meat
• 17:41
  Speaker 3: in general. These are prices across the board that have skyrocketed.
• 17:46
  Speaker 3: And the administration has not been able to contain those.
• 17:50
  Speaker 3: And you look at Congress... And you have people like
• 17:53
  Speaker 3: Tom Emmer on Fox News on Sunday saying the economy
• 17:57
  Speaker 3: is great and people responding to him saying Representative Emmer.
• 18:01
  Speaker 3: We can see our wallets. You can't fake people into
• 18:05
  Speaker 3: believing something that they're not feeling. We learned that under
• 18:08
  Speaker 3: Joe Biden. We're learning it again under Donald Trump. And
• 18:12
  Speaker 3: so what we need is we need a full-throated economic
• 18:15
  Speaker 3: policy to address these things. What we don't need are
• 18:19
  Speaker 3: tariff wars with our closest confidants and closest allies in
• 18:24
  Speaker 3: Canada or tariff wars across the country or endless wars
• 18:28
  Speaker 3: in Iran. all of which have helped increase these prices.
• 18:33
  Speaker 7: Jeannie Shanzano and Rick Davis are going to stay with
• 18:36
  Speaker 7: us and we'll be back in just a moment after
• 18:38
  Speaker 7: we speak with the Congresswoman. I do want to point
• 18:40
  Speaker 7: out as we talk prices here and the point that
• 18:42
  Speaker 7: Jeannie is making with prices across the board, we're looking
• 18:46
  Speaker 7: at a 10-year yield right now at 4.78%. The two-year, Kayleigh,
• 18:49
  Speaker 7: topped 438, the highest since January 2025, just about an
• 18:53
  Speaker 7: hour ago. And of course, the reaction in the stock
• 18:59
  Speaker 7: market is no surprise with stocks decidedly lower.
• 19:03
  Speaker 1: Stay with us on Balance of Power.
• 19:04
  Speaker 7: We'll have much more coming up after this.
• 19:09
  Speaker 5: You're listening to the Bloomberg Balance of Power podcast. Catch
• 19:13
  Speaker 5: us live weekdays at noon and 5 p.m. Eastern on
• 19:16
  Speaker 5: Apple CarPlay and Android Auto with the Bloomberg Business app.
• 19:19
  Speaker 5: You can also listen live on Amazon Alexa from our
• 19:22
  Speaker 5: flagship New York station. Just say Alexa, play Bloomberg 1130.
• 19:28
  Speaker 7: We're going to continue on the theme of affordability, but
• 19:31
  Speaker 7: also paying our bills, which is the point today, the
• 19:34
  Speaker 7: exercise that's about to unfold in Congress. And before she
• 19:37
  Speaker 7: has to run to vote, it's always a pleasure to
• 19:39
  Speaker 7: spend time with Congresswoman Madeline Dean, the Democrat from Pennsylvania's
• 19:42
  Speaker 7: 4th District. She's on appropriations and foreign affairs. Congresswoman, welcome
• 19:47
  Speaker 7: back to Balance of Power.
• 19:49
  Speaker 1: It's good to see you.
• 19:50
  Speaker 7: Live on Capitol Hill and back in Washington for however
• 19:52
  Speaker 7: long that may be. We were talking to Marlon Stutzman
• 19:55
  Speaker 7: a moment ago about the Republican conference meeting. Obviously, you
• 19:58
  Speaker 7: were not in it this morning, but they were talking
• 20:00
  Speaker 7: about midterm messaging. And Lisa McClain, the chair of the conference,
• 20:04
  Speaker 7: called this one of the most aggressive and productive Congresses
• 20:08
  Speaker 7: since Harry Truman was president.
• 20:11
  Speaker 1: Is she right?
• 20:11
  Speaker 8: Oh my.
• 20:12
  Speaker 2: Oh my goodness.
• 20:13
  Speaker 13: Let's recheck our history. No, we have not been productive.
• 20:16
  Speaker 13: We've suffered many shutdowns. We've had a speaker not bring
• 20:21
  Speaker 13: us back to Congress for weeks on end, allowing his
• 20:24
  Speaker 13: members to just go on vacation and try to figure
• 20:27
  Speaker 13: out something to do to fill their time. There's conversation
• 20:30
  Speaker 13: around whether or not we will even last here this week.
• 20:33
  Speaker 13: Will we come back for the three weeks planned for
• 20:35
  Speaker 13: the rest of this month? No, I regret that we
• 20:38
  Speaker 13: are not as productive as we can be. I'm a
• 20:40
  Speaker 13: member of foreign affairs and appropriations. So with foreign affairs,
• 20:44
  Speaker 13: we certainly have an awful lot to talk about around
• 20:47
  Speaker 13: the globe, like an extraordinarily costly and illegal and reckless
• 20:52
  Speaker 13: chaotic war. And then in appropriations, Honest to God, we're
• 20:55
  Speaker 13: going to do a CR today. I will be voting yes,
• 20:59
  Speaker 13: most likely, unless something changes for the CR, because I
• 21:02
  Speaker 13: want some continuity. But that's no way to run a government.
• 21:06
  Speaker 2: So sadly, Ms.
• 21:07
  Speaker 13: McClain has it very wrong. And you can't make that
• 21:10
  Speaker 13: spin and have the American people believe it.
• 21:14
  Speaker 6: Well, you'll be voting yes for the CR unless something changes.
• 21:17
  Speaker 6: As you said, Congresswoman, will you have the opportunity, do
• 21:21
  Speaker 6: you expect, to vote on a Russia sanctions package? And
• 21:23
  Speaker 6: would you? Send that signal to the Kremlin, or are
• 21:26
  Speaker 6: you too concerned about the authority on tariffs that it
• 21:29
  Speaker 6: grants to the president?
• 21:31
  Speaker 13: My number on the CR, I believe we will see
• 21:35
  Speaker 13: that on the floor today. On the Russia sanctions bill,
• 21:40
  Speaker 13: the best information I have is that that is not
• 21:42
  Speaker 13: coming up this week. And here's where I am on that.
• 21:45
  Speaker 13: Ukraine needs our support. I have said since day one, February,
• 21:50
  Speaker 13: four and a half years ago now, and that's only
• 21:53
  Speaker 13: the invasion.
• 21:54
  Speaker 2: That's not even.
• 21:55
  Speaker 13: Considering 12 years ago, Crimea. I have said since day
• 21:59
  Speaker 13: one that we should be doing everything in our power
• 22:02
  Speaker 13: to make sure Ukraine has what it needs to win.
• 22:06
  Speaker 13: We have failed to do that. We originally, initially, in
• 22:09
  Speaker 13: a very strong bipartisan way, supported Ukraine in this assault
• 22:14
  Speaker 13: on its sovereignty and its young democracy. But then you
• 22:17
  Speaker 13: saw us stall and become partisan, with Republicans separating from
• 22:22
  Speaker 13: wanting to support Ukraine. It's been more than two years
• 22:25
  Speaker 13: now since we've done something to support Ukraine. You can
• 22:28
  Speaker 13: see I'm wearing my pin here. I have a terrific
• 22:30
  Speaker 13: Ukrainian-American constituency in my fourth congressional district of Montgomery and
• 22:35
  Speaker 13: Berks Counties, Pennsylvania. So I'm on their side. I'm on
• 22:38
  Speaker 13: the side of Ukraine. Sadly, I don't think we'll do
• 22:41
  Speaker 13: something to support Ukraine this week. I don't think that
• 22:44
  Speaker 13: resolution is coming forward. But regardless of the vehicle, we
• 22:48
  Speaker 13: should be supporting Ukraine. I was critical of the last administration.
• 22:53
  Speaker 13: and urged President Biden and his team to get more
• 22:56
  Speaker 13: support to Ukraine. And I am trying to do the
• 22:59
  Speaker 13: same with this administration.
• 23:01
  Speaker 6: So just to be clear, Congresswoman, if and when it
• 23:04
  Speaker 6: does come to the floor, you intend to vote for
• 23:06
  Speaker 6: the sanctions package?
• 23:08
  Speaker 13: It'll depend upon how it reads. I have not made
• 23:10
  Speaker 13: a call on that vote. If it's giving more authority
• 23:14
  Speaker 13: to the president, you can imagine I'm not keen on
• 23:17
  Speaker 13: that because he's already taken illegal authorities. We have the
• 23:21
  Speaker 13: constitutional authority, the power of the purse under Article 1,
• 23:26
  Speaker 13: not to mention around war. So I'll be looking at
• 23:29
  Speaker 13: the language of the resolution very closely as I profess
• 23:32
  Speaker 13: and believe in my support for Ukraine.
• 23:35
  Speaker 7: Well, sounds like you could be a know-them, Congresswoman, because
• 23:38
  Speaker 7: he would be granted remarkable power over applying tariffs on
• 23:42
  Speaker 7: other nations, and I realize you need to see the document,
• 23:45
  Speaker 7: and we'll talk about that. We'd like to when that arrives.
• 23:49
  Speaker 7: Six months of war with Iran. That was Friday. And
• 23:53
  Speaker 7: as of noon today, CENTCOM is confirming that we have
• 23:56
  Speaker 7: resumed strikes. We're hitting targets around the strait. As the
• 23:59
  Speaker 7: three of us speak right now, Congresswoman, with your committee
• 24:04
  Speaker 7: in mind here, Are you hearing from the White House
• 24:07
  Speaker 7: about leaning into military action or favoring this so-called economic
• 24:13
  Speaker 7: D-Day that the Treasury Secretary was talking about? Because it
• 24:16
  Speaker 7: appears we're pursuing both today.
• 24:19
  Speaker 13: Well, Joe and Kayleigh, I think it's incredibly sad that
• 24:23
  Speaker 13: we are now past six months of this war with
• 24:26
  Speaker 13: no resolution in sight, with no clear mission in sight.
• 24:29
  Speaker 13: And I say that up against a visit I made
• 24:32
  Speaker 13: this summer to Hawaii to the RIMPAC exercises.
• 24:36
  Speaker 2: I can't.
• 24:37
  Speaker 13: Tell you how impressed I am with everybody from Admiral
• 24:42
  Speaker 13: Paparo on down, our Navy and Marine, the exquisite nature
• 24:47
  Speaker 13: of their preparation for us, for national security, and for war.
• 24:51
  Speaker 13: But you put that up against a president who recklessly
• 24:55
  Speaker 13: got us into a war, believing probably that it would
• 24:58
  Speaker 13: have been in and out quickly, like Maduro in Venezuela. And,
• 25:02
  Speaker 13: of course, now he's in a terrible spot. We are
• 25:05
  Speaker 13: in a dangerous spot. Our allies I've met through foreign affairs.
• 25:09
  Speaker 13: I've met with our allies in the region. They are
• 25:12
  Speaker 13: gravely concerned as their countries are suffering damage and casualties.
• 25:16
  Speaker 13: So what I wish is that diplomacy would prevail here,
• 25:19
  Speaker 13: that smart diplomats would come to the fore. You asked
• 25:22
  Speaker 13: about what Congress is hearing from the White House.
• 25:25
  Speaker 9: Nothing.
• 25:26
  Speaker 13: Very little. We had one phone call. with Secretary Rubio
• 25:31
  Speaker 13: and Mr. Witkoff on the memorandum of understanding. And when
• 25:35
  Speaker 13: I asked a tough question, I got cut off. We've
• 25:39
  Speaker 13: had no information from this White House. They have been
• 25:42
  Speaker 13: very reckless. And, obviously, Pete Hegseth is over his head.
• 25:45
  Speaker 13: You saw the resignation, was it today or yesterday, of
• 25:49
  Speaker 13: the head of the Army. How unfortunate that we are
• 25:52
  Speaker 13: losing these incredibly smart, talented, experienced military leaders because of
• 25:59
  Speaker 13: failed administration and a civilian leadership that prizes politics over
• 26:05
  Speaker 13: the lives of American soldiers. We have 18 soldiers dead,
• 26:10
  Speaker 13: 700-plus wounded, $ 100 billion. You want to talk about the economy?
• 26:15
  Speaker 13: More than $ 100 billion spent on this war and everything
• 26:19
  Speaker 13: costing us more. because the Strait is closed. That wasn't
• 26:22
  Speaker 13: a problem seven months ago. The Strait is closed. Everything
• 26:27
  Speaker 13: now costs more. And we've lost so very, very much.
• 26:31
  Speaker 6: Well, and Congresswoman, the president is warning on True Social
• 26:34
  Speaker 6: as we speak that more could be coming. He says
• 26:37
  Speaker 6: that the United States is striking Iranian targets near the
• 26:40
  Speaker 6: Strait of Hormuz. He describes those strikes as large and
• 26:42
  Speaker 6: powerful and says they're in retaliation for Iran's attempt to
• 26:45
  Speaker 6: lay mines and also attempted attack against U.S. forces in Jordan.
• 26:49
  Speaker 6: He goes on to say, if the failed nation of
• 26:51
  Speaker 6: Iran retaliates for this very justified attack, they will be
• 26:54
  Speaker 6: hit again at a much harder and higher level, but
• 26:58
  Speaker 6: it will not be the biggest attack of them all.
• 26:59
  Speaker 6: That is waiting in the wings, and when it is over,
• 27:02
  Speaker 6: there will be very little left of the Islamic Republic
• 27:05
  Speaker 6: of Iran. Do you expect, Congresswoman, that we may get
• 27:08
  Speaker 6: to that point, the biggest attack of them all? Is
• 27:12
  Speaker 6: that the direction this is heading?
• 27:14
  Speaker 2: I pray not.
• 27:16
  Speaker 13: The president has said these kinds of things over and
• 27:18
  Speaker 13: over again. He is so extremely reckless and not well
• 27:22
  Speaker 13: thought out. You've seen over the weekend some of his
• 27:26
  Speaker 13: posts that make this war look like some sort of
• 27:29
  Speaker 13: a silly video game. The president is proving himself to
• 27:33
  Speaker 13: be farcical and feeble, and I wish— Stronger minds would prevail.
• 27:39
  Speaker 13: I wish military leadership would convince these folks as to
• 27:43
  Speaker 13: how to get out of this as safely as possible,
• 27:46
  Speaker 13: leaning on and bringing together our allies in the region,
• 27:49
  Speaker 13: in the Gulf region, including Jordan. After all, we are
• 27:53
  Speaker 13: all in this together. The president's rhetoric has been reckless,
• 27:57
  Speaker 13: but that has been the case for the last 11
• 28:00
  Speaker 13: 1⁄2 years that he's been on the scene running for
• 28:02
  Speaker 13: president or serving as president. So I regret the president's language.
• 28:08
  Speaker 13: And I know the world does, too. Our allies are watching.
• 28:11
  Speaker 13: The people in the region are watching. We are all
• 28:14
  Speaker 13: less safe as a result of this war in Iran.
• 28:18
  Speaker 13: I wish the president could see his way out. And
• 28:20
  Speaker 13: there are ways out of it. A regional agreement around
• 28:24
  Speaker 13: energy and the development of nuclear energy, that is available
• 28:29
  Speaker 13: to this president. I've had the chance to meet with
• 28:31
  Speaker 13: former secretaries of energy. Smart plans are on the table
• 28:36
  Speaker 13: if only the president and his team would pick them up.
• 28:40
  Speaker 6: All right, Congresswoman, we'll leave it there. We know you
• 28:42
  Speaker 6: have to run to the floor for that CR vote.
• 28:44
  Speaker 6: Thanks so much for joining us ahead of it. Congressman
• 28:46
  Speaker 6: Madeleine Dean, the Democrat representing Pennsylvania's 4th District, here with
• 28:50
  Speaker 6: us live. balance of power. As we play it back
• 28:53
  Speaker 6: now to our political panel to get reaction to the
• 28:57
  Speaker 6: congresswoman's comments, Rick Davis and Jeannie Shanzano, Bloomberg Politics contributors,
• 29:01
  Speaker 6: are back with us. Jeannie, that was a lot of
• 29:04
  Speaker 6: forceful language from the congresswoman. She suggests that there are
• 29:07
  Speaker 6: options that the president could choose to seize upon to
• 29:10
  Speaker 6: end this war. And I wonder if you still see
• 29:13
  Speaker 6: viable ones other than what the president is describing as
• 29:16
  Speaker 6: potentially the biggest military attack of them all.
• 29:20
  Speaker 3: Yeah, I mean, that was so insightful by Representative Dean.
• 29:24
  Speaker 3: And I was struck, Kayleigh, by the fact that if
• 29:27
  Speaker 3: I understood correctly, she said they have not heard from
• 29:29
  Speaker 3: the White House since they heard from Secretary Rubio and
• 29:33
  Speaker 3: Steve Witkoff on the MOU, which would be several months ago.
• 29:37
  Speaker 3: And it raises in my mind questions. which as Congress
• 29:41
  Speaker 3: debates about whether the House, at least they should leave town,
• 29:44
  Speaker 3: whether they should stay in town and have a vote
• 29:47
  Speaker 3: on an authorization for a use of military force. But
• 29:50
  Speaker 3: on the point of what, you know, what we can
• 29:53
  Speaker 3: do now, I think the president was headed in the
• 29:55
  Speaker 3: right direction when he was focused on economic strangling of Iran.
• 30:02
  Speaker 3: That is, you know, a long haul. It's something that's
• 30:07
  Speaker 3: going to be hard to achieve. But that is likely
• 30:10
  Speaker 3: the only answer at this point, as well as to
• 30:14
  Speaker 3: Representative Dean's point, trying to move us and see it. which, again,
• 30:20
  Speaker 3: is a long-term fix. The reality is that there is
• 30:25
  Speaker 3: no military solution to this war. There never has been.
• 30:29
  Speaker 3: There never will be. We learned that 40 days in,
• 30:33
  Speaker 3: we changed focus to trying to stranglehold the straight, and
• 30:37
  Speaker 3: now we are back at this, but there is no
• 30:40
  Speaker 3: military solution here. It is going to be diplomatic It
• 30:43
  Speaker 3: is going to be economic. And that's where the focus
• 30:45
  Speaker 3: should lie, in addition to allowing us to get some
• 30:49
  Speaker 3: freedom from dependency.
• 30:52
  Speaker 7: I'm just struck by the tone of both lawmakers this hour.
• 30:55
  Speaker 7: We started off with Republican Marlon Stutzman of Indiana, of course,
• 31:00
  Speaker 7: just heard from Democrat Madeline Dean of Pennsylvania. Rick, it
• 31:05
  Speaker 7: doesn't sound like anybody is happy. on Capitol Hill right now.
• 31:10
  Speaker 7: This is a dark moment for this Congress. Does it
• 31:13
  Speaker 7: end with this vote today?
• 31:14
  Speaker 12: I don't think so. I think this is a debate
• 31:18
  Speaker 12: that's going to continue going on. I mean, remember, they've
• 31:21
  Speaker 12: just got back from five weeks in their districts hearing
• 31:25
  Speaker 12: from constituents campaigning for reelection. And I'm not surprised that
• 31:30
  Speaker 12: they come back sounding pretty sanguine about their prospects of success.
• 31:35
  Speaker 1: You know, they probably got.
• 31:36
  Speaker 12: Five weeks of getting beat up.
• 31:38
  Speaker 2: And I doubt if.
• 31:40
  Speaker 12: There are very many people going up to them saying, wow,
• 31:42
  Speaker 12: I'm so happy with what's going on in America today.
• 31:45
  Speaker 12: So I think we got a good reflection of that.
• 31:48
  Speaker 12: Kudos to our program for putting these two back to
• 31:50
  Speaker 12: back and hearing what is clearly the challenges that are
• 31:55
  Speaker 12: in front of these members of Congress. You know, I
• 31:58
  Speaker 12: was stunned by how committed Congresswoman Dean is to the
• 32:05
  Speaker 12: Ukrainian cause. And yet still the Trump, you know, added
• 32:11
  Speaker 12: power on tariffs is going to stop her from supporting
• 32:15
  Speaker 12: sanctions that would be crippling to the Russian economy. And
• 32:19
  Speaker 12: so it just shows you how polarized Congress is that
• 32:25
  Speaker 12: when they want to do good, the image of Trump
• 32:30
  Speaker 12: somehow benefiting from it would stop them from being able
• 32:34
  Speaker 12: to pull that trigger. So I thought that was an
• 32:37
  Speaker 12: incredible insight. And probably the fact that it was a
• 32:42
  Speaker 12: bipartisan bill that came out of the Senate, it doesn't
• 32:45
  Speaker 12: sound like it's going to be a bipartisan vote in
• 32:47
  Speaker 12: the House.
• 32:49
  Speaker 8: Mm-hmm.
• 32:50
  Speaker 7: Great conversation with our great panel, Rick Davis and Jeannie Shanzano.
• 32:53
  Speaker 7: We thank you both for being here for both of
• 32:56
  Speaker 7: our lawmakers and shedding some light on what it is
• 32:58
  Speaker 7: we're hearing in real time. This vote's going to be
• 33:00
  Speaker 7: getting underway shortly, and we'll let you know, if not
• 33:02
  Speaker 7: on this program, on the late edition of Balance of Power.
• 33:05
  Speaker 7: And as we watch oil prices tick higher, Kayleigh, an
• 33:07
  Speaker 7: important conversation.
• 33:09
  Speaker 1: Ahead with Clay Siegel.
• 33:10
  Speaker 7: He's back with us from Beacon Global Strategies as we
• 33:13
  Speaker 7: ask once again, how high can we go?
• 33:16
  Speaker 1: Stay with us on Balance of Power. We'll have much
• 33:18
  Speaker 1: more coming up after this.
• 33:23
  Speaker 5: You're listening to the Bloomberg Balance of Power podcast. Catch
• 33:27
  Speaker 5: us live weekdays at noon and 5 p.m. Eastern on
• 33:30
  Speaker 5: Apple CarPlay and Android Auto with the Bloomberg Business app.
• 33:33
  Speaker 5: Listen on demand wherever you get your podcasts or watch
• 33:37
  Speaker 5: us live on YouTube.
• 33:40
  Speaker 6: The highest levels we've seen on oil since late July.
• 33:42
  Speaker 6: It's been about a month, of course, this price action
• 33:44
  Speaker 6: being driven in large part by what we're seeing in
• 33:46
  Speaker 6: the Middle East. The U.S.
• 33:48
  Speaker 2: As of 12 p.m.
• 33:49
  Speaker 6: Eastern striking Iranian targets around the Strait of Hormuz in Iran,
• 33:52
  Speaker 6: according to The semi-official Tasnim News Agency is promising a
• 33:56
  Speaker 6: response which could quickly turn into an escalatory cycle. We'll
• 34:00
  Speaker 6: see ultimately how that shakes out, knowing, of course, that
• 34:02
  Speaker 6: the president probably doesn't like what he's seeing in oil
• 34:06
  Speaker 6: markets today. And in fact, at this hour, right about now,
• 34:09
  Speaker 6: he's expected to gather a number of major oil players,
• 34:12
  Speaker 6: retailers and refiners. to the White House to talk about this, knowing, Joe, that,
• 34:18
  Speaker 6: of course, the United States right now has a serious
• 34:20
  Speaker 6: issue with refining capacity. It's one thing to find more
• 34:24
  Speaker 6: sources of crude, Venezuela, for example. It's another to be
• 34:28
  Speaker 6: able to actually refine that into the products that are.
• 34:30
  Speaker 1: Needed across the country.
• 34:31
  Speaker 7: I see Marathon is on the list, among others the
• 34:33
  Speaker 7: president will be talking to, apparently about increasing refining capacity. But, Kayleigh,
• 34:38
  Speaker 7: we're already at 98%. Unless you're opening new refineries, it's
• 34:41
  Speaker 7: kind of difficult to imagine refining. how that's all going
• 34:44
  Speaker 7: to work. It's just some of the stuff that we
• 34:45
  Speaker 7: want to discuss with Clay Siegel. What a great day
• 34:48
  Speaker 7: to have Clay with us. He leads the energy practice
• 34:50
  Speaker 7: at Beacon Global Strategies.
• 34:52
  Speaker 1: Welcome back.
• 34:53
  Speaker 7: As Kaylee mentioned, they're probably walking up the driveway right
• 34:55
  Speaker 7: now or sitting down with the president to talk about this.
• 34:58
  Speaker 7: And we remember the last time President Trump brought big
• 35:01
  Speaker 7: oil executives in to talk about Venezuela specifically. The Exxon CEO,
• 35:07
  Speaker 7: Darren Woods, said it was uninvestable. Now, apparently, we're taking
• 35:10
  Speaker 7: a massive share in Venezuela. even as we manage the
• 35:14
  Speaker 7: situation in the straight. The market doesn't know what to
• 35:17
  Speaker 7: do with this other than push oil prices higher again.
• 35:19
  Speaker 7: This movie keeps replaying itself. Do we test the highs
• 35:24
  Speaker 7: once again?
• 35:25
  Speaker 11: Well, that's possible, Joe. You know, we're here, we're starting
• 35:28
  Speaker 11: month seven of the battle of the state of Hormuz.
• 35:31
  Speaker 11: I've been in to see you guys several times in
• 35:33
  Speaker 11: the intervening period. We still have this basic stalemate ever
• 35:36
  Speaker 11: since the MOU, the Memorandum of Understanding, kind of collapsed
• 35:40
  Speaker 11: earlier in the summer. So both sides think they have
• 35:43
  Speaker 11: the upper hand. Each side thinks that it can outlast
• 35:45
  Speaker 11: the other with its leverage. And so Iran knows that
• 35:48
  Speaker 11: President Trump does not want to go back to a
• 35:50
  Speaker 11: major kinetic war like we had in March. And he
• 35:53
  Speaker 11: knows that we're low on, they know we're low on
• 35:56
  Speaker 11: interceptor missiles. Our forward bases in the Middle East have
• 35:59
  Speaker 11: been hit pretty hard. And of course, we always have
• 36:01
  Speaker 11: sensitivity to inflation and higher prices. But President Trump also
• 36:05
  Speaker 11: knows that there's some leverage that he has on Tehran,
• 36:07
  Speaker 11: particularly from the naval blockade, which is preventing them from importing,
• 36:11
  Speaker 11: preventing them from selling oil. Each side has some leverage,
• 36:13
  Speaker 11: but this kind of blow up like we've seen over
• 36:15
  Speaker 11: the last 24 hours was inevitable in a stalemate, a
• 36:18
  Speaker 11: tug of war like this.
• 36:19
  Speaker 6: Well, even if it remains a stalemate, to listen to
• 36:21
  Speaker 6: the Treasury Secretary characterize it, the Strait of Hormuz is
• 36:24
  Speaker 6: going to become a worthless waterway eventually anyway, because you're
• 36:27
  Speaker 6: just going to have pipelines running around it and alternate
• 36:29
  Speaker 6: routes to get out the oil. Is he right?
• 36:31
  Speaker 11: Well, I think that pipelines can be one piece of
• 36:34
  Speaker 11: the puzzle in terms of de-risking energy security and affordability.
• 36:38
  Speaker 11: But I would caution against over-indexing on pipelines. Sure, they'll
• 36:41
  Speaker 11: be built, and sure, they'll help diversify those flows and
• 36:44
  Speaker 11: supply a little bit. But the pipelines and wherever they
• 36:47
  Speaker 11: end in order to fill the super tankers are also
• 36:50
  Speaker 11: prone to geopolitical risk, to attacks, security problems. So you
• 36:54
  Speaker 11: show me where the pipeline is going to be built
• 36:56
  Speaker 11: and wind up, and I'll tell you what the risk
• 36:58
  Speaker 11: profile is.
• 36:59
  Speaker 1: What do they have to talk about today?
• 37:00
  Speaker 7: I mean, when it comes to refining capacity specifically, hasn't
• 37:05
  Speaker 7: the industry done everything that it can? We've cranked up
• 37:08
  Speaker 7: to maximum capacity today. maybe not drilling, but certainly refining.
• 37:12
  Speaker 7: And if you're looking at $ 4. 09, how do you move
• 37:15
  Speaker 7: that number otherwise?
• 37:17
  Speaker 11: Yeah, I think the idea there is the best case
• 37:19
  Speaker 11: scenario would be a government, private, Just say coordination and
• 37:24
  Speaker 11: meeting of the minds that allows them to leave no
• 37:26
  Speaker 11: stone unturned in terms of helping consumers with affordable prices.
• 37:30
  Speaker 11: You're right. We've played most of those levers already. If
• 37:33
  Speaker 11: you could move your production a little bit away from
• 37:35
  Speaker 11: gasoline and a little more toward diesel, that definitely helps
• 37:39
  Speaker 11: at the margin.
• 37:40
  Speaker 1: Is that something they're discussing?
• 37:41
  Speaker 11: Well, I don't know whether they're discussing it or not,
• 37:43
  Speaker 11: but we're talking about the tools and the toolkit in
• 37:46
  Speaker 11: order to alleviate some of the price pressure. And then
• 37:49
  Speaker 11: just the other day, the EPA granted some small refiners
• 37:52
  Speaker 11: exemptions to certain parts of their compliance regulations. I think
• 37:56
  Speaker 11: there you're really only talking about cents per gallon. So
• 37:59
  Speaker 11: these are small measures taken in increments. Hopefully they can
• 38:04
  Speaker 11: add a little bit of price relief.
• 38:05
  Speaker 6: Why not just build more refineries? Clay, is this a
• 38:08
  Speaker 6: permitting issue, as we often hear? Is it simply about
• 38:11
  Speaker 6: making that capital investment in a world that, at least
• 38:14
  Speaker 6: prior to this administration, was accelerating its turn away from
• 38:17
  Speaker 6: traditional fossil fuels? What is the holdup, and can the
• 38:19
  Speaker 6: president get at it?
• 38:20
  Speaker 11: We really could use more supply in the form of
• 38:23
  Speaker 11: new refiners. We've had a couple of new refinery units built,
• 38:27
  Speaker 11: but whole refineries, we haven't built one since the 70s.
• 38:29
  Speaker 11: They are really long lead time, capital intensive projects. And
• 38:34
  Speaker 11: there's a lot of variation in refining margins year in
• 38:37
  Speaker 11: and year out, even quarter in and quarter out. And
• 38:40
  Speaker 11: so I think that investors want to know that they
• 38:41
  Speaker 11: could have a stable runway of reasonable returns through the
• 38:45
  Speaker 11: ups and downs of the cycle. And I'm glad you
• 38:47
  Speaker 11: mentioned permitting, because I think maybe in the new Congress,
• 38:50
  Speaker 11: we have some hope for permitting reform that could affect
• 38:52
  Speaker 11: energy projects and make it more efficient to connect supply
• 38:56
  Speaker 11: with demand in different parts of the United States.
• 38:58
  Speaker 7: That brings us back to the pipeline issue as well, right?
• 39:01
  Speaker 7: You're not getting that either without permitting reform in this country.
• 39:04
  Speaker 7: At least from what these companies are telling us.
• 39:06
  Speaker 11: For domestic pipelines, that's definitely the case. Permitting reform would
• 39:09
  Speaker 11: speed those projects up and create efficiencies for both the
• 39:12
  Speaker 11: producers and the consumers of the energy. We were talking before, though,
• 39:15
  Speaker 11: I think particularly about pipelines in other parts of the world.
• 39:18
  Speaker 11: And seeing if we could secure those energy supplies from
• 39:21
  Speaker 11: places like in the Gulf, piping it to the Red Sea,
• 39:23
  Speaker 11: piping it to the Gulf of Oman. But neither of
• 39:25
  Speaker 11: those two locations have been a bastion for commercial shipping
• 39:29
  Speaker 11: security in recent years.
• 39:30
  Speaker 6: Well, then you raised the question of pipelines in Venezuela.
• 39:33
  Speaker 6: We were talking to the former energy secretary, Dan Burriette,
• 39:35
  Speaker 6: last night, and he said, look, that heavy crude, it's
• 39:38
  Speaker 6: kind of hard to work its way through a pipeline.
• 39:40
  Speaker 6: You've got to make sure that it's actually coated with
• 39:42
  Speaker 6: materials that can make sure that it's able to flow.
• 39:44
  Speaker 6: And that's just one of the issues that plenty more
• 39:47
  Speaker 6: when we consider the wider infrastructure revamp that is needed
• 39:50
  Speaker 6: in Venezuela if we actually want to access these 65
• 39:52
  Speaker 6: billion barrels of reserves. How realistic is it, Clay, to
• 39:56
  Speaker 6: expect that in this president's term, that Venezuelan oil that
• 40:01
  Speaker 6: the U.S. has just gotten a share of is actually
• 40:03
  Speaker 6: going to make a difference for U.S. consumers?
• 40:05
  Speaker 11: Well, there's reason for skepticism that that particular deal that's
• 40:07
  Speaker 11: been highlighted in recent days is going to come to
• 40:09
  Speaker 11: fruition and materially move the needle on oil supply and
• 40:13
  Speaker 11: prices in the But we shouldn't let that obscure the
• 40:16
  Speaker 11: fact that we're having great progress, I think, in the
• 40:19
  Speaker 11: Venezuelan oil sector since the interventions at the beginning of
• 40:22
  Speaker 11: this year. And so we have companies like just reported
• 40:25
  Speaker 11: in the news, Chevron, Hunt Oil, SLB are all reportedly
• 40:30
  Speaker 11: making progress with their deals and some of the European
• 40:32
  Speaker 11: majors as well on gas projects in Venezuela. So this
• 40:36
  Speaker 11: amplifies the idea of Venezuela being a part of this
• 40:38
  Speaker 11: America's Western Hemisphere engine for oil supply.
• 40:42
  Speaker 1: So then it's not uninvestable. Have we proven that wrong?
• 40:45
  Speaker 11: Think that for certain elements of the oil patch, it's
• 40:49
  Speaker 11: more investable than others. I mentioned oil field services companies.
• 40:52
  Speaker 11: Those guys are differentiated from the majors that require much
• 40:56
  Speaker 11: longer pipeline, let's say times for their projects to come
• 40:59
  Speaker 11: to fruition and deliver returns and payback periods. Oil field
• 41:02
  Speaker 11: services can come in and in a period of a couple, three,
• 41:05
  Speaker 11: four years, realize the needed returns on their investments. So
• 41:08
  Speaker 11: I think you were saying that's why they're jumping into
• 41:11
  Speaker 11: the opportunities in Venezuela.
• 41:12
  Speaker 8: Yeah.
• 41:13
  Speaker 14: All right, Clay, great to have you.
• 41:14
  Speaker 6: As always, Clay Siegel joining us from Beacon Global Strategies,
• 41:18
  Speaker 6: where he's managing director, also a senior fellow at the
• 41:20
  Speaker 6: Center for Strategic and International Studies. Back with us in
• 41:23
  Speaker 6: our Washington, D.C.
• 41:24
  Speaker 11: Studio.
• 41:25
  Speaker 6: Thank you so much. We have yet to get eyes
• 41:27
  Speaker 6: on President Trump or any of the energy and retail
• 41:30
  Speaker 6: and refining executives who are expected to be meeting with
• 41:33
  Speaker 6: him right now at the White House. This was a
• 41:34
  Speaker 6: closed event on the president's schedule. It's not clear if
• 41:37
  Speaker 6: he'll be opening it up to press and giving them
• 41:40
  Speaker 6: an opportunity to question what exactly he wants these retailers
• 41:44
  Speaker 6: and refiners to do. But of course, it also would
• 41:46
  Speaker 6: be an opportunity for the president to answer exactly how
• 41:49
  Speaker 6: far he's willing to take strikes against Iran, which resumed
• 41:52
  Speaker 6: again at 12 p.m. Eastern today.
• 41:53
  Speaker 7: As he writes on Truth Social, if a failed nation
• 41:55
  Speaker 7: of Iran retaliates for this very justified attack, they will
• 41:59
  Speaker 7: be hit again at a much harder and higher level.
• 42:02
  Speaker 7: But it will not be the biggest attack of them all.
• 42:05
  Speaker 7: That is waiting in the wings. And when that is over,
• 42:07
  Speaker 7: there will be very little left of the Islamic Republic
• 42:11
  Speaker 7: of Iran. This does not sound like a situation that
• 42:15
  Speaker 7: could be lending itself to negotiations anytime soon.
• 42:17
  Speaker 1: It might be a wider war.
• 42:19
  Speaker 10: Yeah.
• 42:19
  Speaker 6: So let's get into this now with Nick Wadhams, who
• 42:21
  Speaker 6: is our managing editor for international security and the economy
• 42:24
  Speaker 6: here at Bloomberg and is with us in our DC studio. Now, Nick,
• 42:28
  Speaker 6: we've seen reports from a semi-official news agency in Iran
• 42:32
  Speaker 6: that Iran is planning retaliation for the retaliation, which was
• 42:35
  Speaker 6: also retaliation Is this spiraling at this point?
• 42:38
  Speaker 15: You know, it's hard to tell. I mean, it's definitely spiraling,
• 42:41
  Speaker 15: but it's hard to tell which direction it's spiraling. I mean,
• 42:44
  Speaker 15: it feels a little like Groundhog Day. We have just
• 42:46
  Speaker 15: been here so many times. We felt like we were
• 42:50
  Speaker 15: on the de-escalatory off-ramp, at least from a kinetic perspective,
• 42:54
  Speaker 15: because the administration rolled out these sanctions. This was going
• 42:57
  Speaker 15: to be economic D-Day. It was going to force Iran's capitulation.
• 43:00
  Speaker 15: And we understood at the time that the administration's thinking
• 43:03
  Speaker 15: was that They recognized that military action was not having
• 43:07
  Speaker 15: the result they needed, so we were focused on the economy.
• 43:09
  Speaker 15: Now it looks like the president is back with these
• 43:12
  Speaker 15: threats for a massive attack. But what we do know
• 43:16
  Speaker 15: is he has been told in not uncertain terms, very
• 43:20
  Speaker 15: certain terms, that there are a lot of questions around
• 43:23
  Speaker 15: how to sustain this fight for the U.S. military in
• 43:26
  Speaker 15: terms of munitions, stocks, files, overextending U.S. assets in the region.
• 43:29
  Speaker 15: So the president may be promising. It's not sure the
• 43:32
  Speaker 15: military can deliver it.
• 43:33
  Speaker 1: Well, this is interesting.
• 43:35
  Speaker 7: A factory pier port tower in southern Iran, not the
• 43:38
  Speaker 7: power plants or the desalination facilities he's threatened in the past.
• 43:42
  Speaker 7: Do we presume that is what the biggest attack of
• 43:45
  Speaker 7: them all would include?
• 43:47
  Speaker 15: Very difficult to tell what he actually means by that.
• 43:49
  Speaker 14: I mean, it could be bridges. It could be power plants.
• 43:52
  Speaker 14: It could be other.
• 43:53
  Speaker 7: He was asked about a nuclear option in the Oval
• 43:55
  Speaker 7: Office yesterday. He told the reporter that was a stupid question.
• 43:57
  Speaker 7: So I'm assuming that's not on the table here.
• 43:59
  Speaker 15: I would say a nuclear attack. I mean, one would
• 44:02
  Speaker 15: think that would be off the table. But, of course,
• 44:05
  Speaker 15: in these times, you never quite know. But I think
• 44:08
  Speaker 15: there would be.
• 44:08
  Speaker 14: A lot of pushback.
• 44:10
  Speaker 15: Internally even among some of his biggest supporters against an
• 44:14
  Speaker 15: idea like that.
• 44:14
  Speaker 14: I mean, this is the big question for the president.
• 44:16
  Speaker 15: He likes to fire off these tweets that suggest The biggest,
• 44:21
  Speaker 15: the worst, it was some months ago when he basically
• 44:23
  Speaker 15: threatened to destroy Iranian civilization.
• 44:26
  Speaker 14: Yeah. So here we are again.
• 44:28
  Speaker 15: There is a sort of taco element to this. But
• 44:31
  Speaker 15: then again, he did invade Venezuela and grab Nicolas Maduro and.
• 44:35
  Speaker 14: He did attack Iran.
• 44:36
  Speaker 15: So you do have that feeling that he could really
• 44:38
  Speaker 15: go anywhere and do anything at any time.
• 44:40
  Speaker 8: Yeah.
• 44:41
  Speaker 6: And he could just as easily pivot back to the
• 44:43
  Speaker 6: economic warfare D-Day attack that you were talking about earlier.
• 44:47
  Speaker 6: Are we expecting further developments on that front? More sanctions
• 44:51
  Speaker 6: placed on banks, whether they're major or minor, I guess
• 44:55
  Speaker 6: you'd tell me.
• 44:55
  Speaker 15: I mean, it's really interesting because the rhetoric really did
• 45:00
  Speaker 15: not end up sort of meeting with what the rollout
• 45:03
  Speaker 15: has looked like. The sanctions so far after Treasury Secretary
• 45:06
  Speaker 15: Besson gave that speech Pretty underwhelming. They sanctioned a branch
• 45:11
  Speaker 15: of Egypt's second largest bank, and then you had Besson. Today,
• 45:16
  Speaker 15: actually saying, you know, that they didn't want to sanction Misr,
• 45:21
  Speaker 15: the Egyptian bank, completely. So you see already the limits
• 45:25
  Speaker 15: they're putting on this. You know, there had been some
• 45:27
  Speaker 15: speculation that maybe they would go after the Chinese, the
• 45:29
  Speaker 15: big four Chinese banks. Looks like they are not going
• 45:32
  Speaker 15: to do that. Treasury Secretary said it himself.
• 45:34
  Speaker 14: Hey, what do you want me to do? Blow up
• 45:36
  Speaker 14: the global economy.
• 45:37
  Speaker 15: So he's certainly aware of the dangers that if you
• 45:39
  Speaker 15: push too hard, the sort of splashback on the U.S.
• 45:42
  Speaker 14: Could be pretty severe.
• 45:43
  Speaker 7: What are you watching as a professional covering this in
• 45:46
  Speaker 7: the next couple of hours here or 24 hours to
• 45:49
  Speaker 7: know whether this is just another eruption or something larger?
• 45:53
  Speaker 15: Well, the big challenge we have really is that the
• 45:56
  Speaker 15: administration does not often detail precisely what the strikes hit.
• 46:01
  Speaker 14: But what we're.
• 46:02
  Speaker 15: Looking for are a few things. One is obviously the
• 46:04
  Speaker 15: extent of the damage. Do they broaden to civilian targets,
• 46:06
  Speaker 15: and what does that mean? Then also, then, what is
• 46:09
  Speaker 15: the Iranian response?
• 46:10
  Speaker 14: Do they hit U.S.
• 46:10
  Speaker 1: Bases?
• 46:11
  Speaker 14: And that really is the big question for us going forward.
• 46:14
  Speaker 7: Threatening to do just that. Nick Wadhams, thank you. Bloomberg
• 46:17
  Speaker 7: News Managing Editor, International Security. and economy with the breaking
• 46:21
  Speaker 7: news that we have been managing throughout the past two hours,
• 46:25
  Speaker 7: the resumption of strikes against Iran. Thanks for listening to
• 46:31
  Speaker 7: the Balance of Power podcast. Make sure to subscribe if
• 46:34
  Speaker 7: you haven't already at Apple, Spotify.
• 46:36
  Speaker 1: Or wherever you get your podcasts. And you can find
• 46:39
  Speaker 1: us live every weekday from Washington, D.C. at noontime Eastern
• 46:43
  Speaker 1: at Bloomberg.com.