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US Government Shutdown Looms · Bloomberg Intelligence

• 0:02
  Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
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• 0:22
  Speaker 3: This is Bloomberg Intelligence Radio. Let me set the stage
• 0:25
  Speaker 3: for you. So if you're a political commentator, as if
• 0:28
  Speaker 3: yesterday you're like cool, I'm like really close to being
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  Speaker 3: on vac Like I'm just going to get through the seat.
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  Speaker 3: The Continuing Resolution is going to happen. The Government's not
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  Speaker 3: going to shut down Friday. I'm going to get to
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  Speaker 3: go and go to a beach and hang out and
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  Speaker 3: have a little drink with umbrellas. And then yesterday after
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  Speaker 3: four o'clock that dream gets dashed because at President Donald
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  Speaker 3: Trump is now elect is now opposing House Speaker Mike
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  Speaker 3: Johnson's plan to avoid that government shutdown instead now calling
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  Speaker 3: for a new approach that includes raising the debt ceiling,
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  Speaker 3: making it very complicated as to what that road is
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  Speaker 3: us as Henry to Trace, managing partner and director of
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  Speaker 3: Economic Policy at Beta Partners, not sipping on her little
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  Speaker 3: umbrella drink, Henrietta.
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  Speaker 1: Why, Alex I feel very triggered by that entire introduction.
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  Speaker 4: I appreciated all, but that you're exactly right.
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  Speaker 1: I think that this is an incredibly smart move for
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  Speaker 1: the incoming Trump team. They have no skin in the
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  Speaker 1: game right now, he's not the president. And what's going
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  Speaker 1: to happen next year, as we've been discussing with clients
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  Speaker 1: for months now, is that they're going to have to
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  Speaker 1: face perpetual risks of government shutdown and then in July
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  Speaker 1: a debt ceiling negotiation with Democrats.
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  Speaker 4: And let's just think about the numbers here.
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  Speaker 1: In twenty twenty three, seventy one Republicans voted against increasing
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  Speaker 1: the debt ceiling.
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  Speaker 4: There's only ten blue dogs.
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  Speaker 1: Of the Democratic Conference of Moderates who might cross the
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  Speaker 1: aisle and vote for a debt ceiling hike sometime this week.
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  Speaker 1: So basically, the math just does not add up for
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  Speaker 1: trying to get sixty votes in the Senate and two
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  Speaker 1: hundred and eighteen votes in the House to increase the
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  Speaker 1: debt ceiling in the next forty eight hours. But it's
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  Speaker 1: incredibly intelligent of Trump to try to get it out
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  Speaker 1: of the way because it is going to be a
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  Speaker 1: massive impediment to the Republican agenda in twenty twenty five
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  Speaker 1: if it's not cleared early.
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  Speaker 5: If there's a government shutdown, won't the blame be placed
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  Speaker 5: upon the Republican Party? And if so, how does that
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  Speaker 5: calculus work?
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  Speaker 4: Right? It always is.
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  Speaker 1: The blame is always always placed on the Republican Conference.
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  Speaker 1: They are the ones who instigate government shutdowns, going as
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  Speaker 1: far back as Ted Cruz and what was that twenty eleven,
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  Speaker 1: twenty thirteen. You know, it's playing to the American voter
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  Speaker 1: that Republicans are to blame. But there's a disproportionate amount
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  Speaker 1: of Democrats who care about a government shutdown versus Republicans
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  Speaker 1: who don't see it as too much of a big deal.
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  Speaker 4: The optics are obviously atrocious. You're going to.
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  Speaker 1: Send federal employees home during the holidays over Christmas without
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  Speaker 1: a paycheck in the next two weeks. You're going to
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  Speaker 1: shut all the national parks where Americans are travel at
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  Speaker 1: pretty high rates right now over the holidays. So it's
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  Speaker 1: definitely not good optics. It makes Congress looks dysfunctional, But
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  Speaker 1: what it's really showing us and the Christmas present for
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  Speaker 1: investors right now is that this is a precursor of
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  Speaker 1: just how dysfunctional Republicans are going to be next year.
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  Speaker 1: They have not had the votes for government funding bills
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  Speaker 1: for a decade, and usually it's Democrats to bail them out.
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  Speaker 1: And right now Kee Jefferies and Chuck Schumer are holding
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  Speaker 1: their party together to say, look, this is your mess.
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  Speaker 4: You bail yourself out of this.
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  Speaker 1: Yeah.
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  Speaker 3: I feel like I use that with my daughter sometimes too.
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  Speaker 3: But the dead ceiling issue, right like moving forward the
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  Speaker 3: dead ceialing issue. So Trump won't have to deal with
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  Speaker 3: it in the summer, but instead that we'll come under
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  Speaker 3: Biden's watch. He said to NBC that he'd like to
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  Speaker 3: get rid of the debt ceiling all together. How do
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  Speaker 3: you think that particular part plays out.
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  Speaker 4: Yeah, I mean that's very expected from Trump.
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  Speaker 1: He has famously said, let's just see what happens if
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  Speaker 1: you default, So I think his position on this is
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  Speaker 1: very clear. It's a nightmare for any present to have
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  Speaker 1: to increase the debt ceiling because you need to negotiate
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  Speaker 1: with the other party. The difference here is that you can,
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  Speaker 1: in fact increase the debt ceiling be a reconciliation. So
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  Speaker 1: if Republicans do not want to negotiate with Democrats. They
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  Speaker 1: all they have to do is include a debt ceiling
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  Speaker 1: hike in the next reconciliation bill, which the Senate Budget
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  Speaker 1: Committee is hoping to mark up as early as the
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  Speaker 1: first week of January. So there is an alternative here
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  Speaker 1: and Democrats know that. So if Republicans really do want
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  Speaker 1: it off the table, they have a path forward that
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  Speaker 1: they just need to carry the votes. They just need
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  Speaker 1: to find two hundred and seventeen, and there have never
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  Speaker 1: been two hundred and seventeen Republican votes for the debt sealing.
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  Speaker 5: Henrietta, are you surprised that we have heard relatively little,
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  Speaker 5: if anything from the Biden administration. It's President elect Trump
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  Speaker 5: and his representatives taken all the auction in out of
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  Speaker 5: room about this topic.
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  Speaker 4: Absolutely.
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  Speaker 1: I think that's a really important dynamic to all this.
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  Speaker 1: We know that Joe Biden, as president and even a Senator,
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  Speaker 1: has always preferred sort of the diplomatic, negotiated solution. Democrats
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  Speaker 1: generally believe the government phone for a purpose, and I
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  Speaker 1: think if Biden wanted to insert himself into this process,
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  Speaker 1: he could, but you're absolutely correct, he's been completely off
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  Speaker 1: the radar in this entire conversation, which admittedly only popped
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  Speaker 1: up in the last twenty four hours.
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  Speaker 3: So what do we think happens?
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  Speaker 1: Like?
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  Speaker 3: Are we extending programming on television and radio on Friday
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  Speaker 3: to cover the weekend?
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  Speaker 1: Like?
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  Speaker 3: What are we think in here?
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  Speaker 1: Yeah, my odds of a shutdown are about twenty percent
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  Speaker 1: right now, which is admittedly very high for me. I'm
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  Speaker 1: usually in this zero to five percent range from a shutdown,
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  Speaker 1: so I'm much higher than I usually am. But I
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  Speaker 1: don't think a shutdown is guaranteed. I think that Speaker
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  Speaker 1: Johnson and indeed President elect Trump should want the government
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  Speaker 1: to stay open so that on January third, they can
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  Speaker 1: get the ball rolling, they can elect their speaker, they
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  Speaker 1: can start passing if this fill your twenty twenty five budget,
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  Speaker 1: paving the way for a reconciliation bill on border and
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  Speaker 1: then a future package on the tax package next year.
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  Speaker 1: That is, you know, investors should take away one thing today.
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  Speaker 1: It's that the tax bill it's going to take all year.
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  Speaker 1: It's going to be very hard to write, and there's
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  Speaker 1: some very strong chance that Republicans have to negotiate with
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  Speaker 1: Democrats on it, and that odds are growing as this
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  Speaker 1: debt ceiling, A c our fight is exhibiting in real time,
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  Speaker 1: but I don't think we'll shut down. I think a
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  Speaker 1: very short term, maybe two weeks stopgap bill is what
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  Speaker 1: we're going to see probably tomorrow morning.
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  Speaker 6: Interesting.
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  Speaker 5: Henrietta, thank you so much for joining us. I know
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  Speaker 5: you're super busy when all this news breaking here. Henrietta
• 6:18
  Speaker 5: trez Manage, your partner and director of economic policy for
• 6:20
  Speaker 5: Vida Partners. She has safely asconced down there in New Orleans.
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  Speaker 5: She's like, I'm not going to Washington or New York
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  Speaker 5: any that's silliness.
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  Speaker 3: Yeah, but she's probably not getting the umbrella drink either.
• 6:28
  Speaker 5: So yeah, she's not in there. She spent the work.
• 6:29
  Speaker 4: A little wind there is.
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  Speaker 2: That you're listening to the Bloomberg Intelligence Podcast. Catch us
• 6:36
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  Speaker 2: Just say Alexa Play Bloomberg eleven thirty, Alex.
• 6:50
  Speaker 5: Steel, Paul Sweeney. We're live here in on our Bloomberg
• 6:52
  Speaker 5: Interactive Broker Studio. We're streaming live on YouTube as well,
• 6:55
  Speaker 5: also ahead over YouTube dot com search Bloomberg Podcast, and
• 6:57
  Speaker 5: that's where you will find us again. Yesterday, the market
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  Speaker 5: really surprised, let's put it that way, on the messaging
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  Speaker 5: coming out of the Fed here as it relates to
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  Speaker 5: potential cuts. In twenty twenty five, we had the S
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  Speaker 5: and P off two and a half percent, the Nastack
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  Speaker 5: off three and a half percent. Yesterday, big, big volume
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  Speaker 5: across the board, a little bit of a rebound here
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  Speaker 5: this morning. Let's see where we go from here. David
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  Speaker 5: Kodla joins US founder, chief executive officer, and chief investment
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  Speaker 5: strategist at Mainstay Capital Management, Troy, Michigan, A great town,
• 7:27
  Speaker 5: by the way, been there, Hey, David, talk to us about,
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  Speaker 5: you know, kind of how you saw the market action
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  Speaker 5: yesterday afternoon and then maybe today kind of what's the
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  Speaker 5: market telling me about the how it views this federal reserve.
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  Speaker 7: Yeah, I think that the Good morning Paul per your
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  Speaker 7: lead into the segment. I think the markets and investors
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  Speaker 7: were surprised, and I think also confused. I think the
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  Speaker 7: presser was quite confusing. Jay Powell, you know, if I
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  Speaker 7: heard all that and here.
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  Speaker 2: Talking about why why.
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  Speaker 7: He was hiking rates a quarter point would have been
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  Speaker 7: a good explanation, but they're not right. They're cutting a
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  Speaker 7: quarter point. So there's some real confusion about you know,
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  Speaker 7: where where the FED is headed. Are they making another
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  Speaker 7: policy mistake as we speak, And as far as the
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  Speaker 7: FED is concerned, you know, they're their their problem is uncertainty.
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  Speaker 7: You know, we have a saying in our industry, right
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  Speaker 7: the markets hate uncertainty. Well, the FED hates uncertainty too.
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  Speaker 7: And they really don't know what to expect for inflation
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  Speaker 7: next year with Trump policies still not being fully known,
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  Speaker 7: how they'll get rolled out, when they'll get rolled out. Uh,
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  Speaker 7: some of those very potentially very inflationary. They don't know
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  Speaker 7: how much inflation will be fighting next year. But the
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  Speaker 7: presser was more about the labor market, you know, the
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  Speaker 7: other side of the mandate.
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  Speaker 2: So, uh, the.
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  Speaker 7: Market was just confused in the face of that. I
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  Speaker 7: think it was you know, shoot now asked questions later.
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  Speaker 3: I guess the question that rose yes to many economists
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  Speaker 3: is that the FED is at a risk of making
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  Speaker 3: a policy mistake in that they're going to fight and
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  Speaker 3: inflation that they don't necessarily need to fight at the
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  Speaker 3: expense of the labor market. That was one narrative that
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  Speaker 3: some economists were putting out there.
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  Speaker 7: What do you think of that, Well, good morning, Alex.
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  Speaker 7: I think that I think they're focused on the I
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  Speaker 7: think they're focused on the wrong thing. I think that
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  Speaker 7: twenty twenty five is going to be the year of
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  Speaker 7: the stubborn inflation battle. Whether it's the massive federal deficit,
• 9:35
  Speaker 7: spending that's going to happen, tax cuts, all these things
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  Speaker 7: that are good for the economy, but in tariffs especially
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  Speaker 7: that could cause a rise in inflation. It's that area
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  Speaker 7: that is more of the problem, I think than labor,
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  Speaker 7: and that's where you're seeing on the long end of
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  Speaker 7: the curve. Look what's happened since September eight teenth. Over
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  Speaker 7: the past three months, the Fed has cut one hundred
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  Speaker 7: basis points. The ten year yield has gone up nearly
• 10:08
  Speaker 7: one hundred basis points. That is not the normal reaction
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  Speaker 7: function that we expect. In fact, we usually the ten
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  Speaker 7: year follows by some degree to what the Fed is doing.
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  Speaker 7: So that's the bond vigilantes. At Yard Denny's coin term
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  Speaker 7: back in the nineties, it's a bond vigilantes that are
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  Speaker 7: fighting the FED. And so there's just a lot of
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  Speaker 7: confusion out there. I think uncertainly on the part of
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  Speaker 7: the FED. That's why the press or seem confused. And
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  Speaker 7: I think there's they need to be looking more towards
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  Speaker 7: inflation than labor right now in my opinion.
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  Speaker 5: David, you've been in these markets many years. You've seen
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  Speaker 5: all kinds of cycles and news events, and it looks
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  Speaker 5: like we may have another government shutdown. As an investor,
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  Speaker 5: how does that factor in, if at all, to your outlook?
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  Speaker 7: You know, and back in the mid nineties when we
• 10:57
  Speaker 7: had this first government shut down pending, it was armageddon
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  Speaker 7: and the markets reacted violently to it. As years have
• 11:06
  Speaker 7: gone by, we've seen that investors in the markets kind
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  Speaker 7: of shrug off the antics in Washington, d C. More
• 11:14
  Speaker 7: and more. And for many of these types of events,
• 11:16
  Speaker 7: we might get volatility for a day, maybe two days,
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  Speaker 7: but it passes. I think the markets investors have learned
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  Speaker 7: to largely ignore it or have just chosen to, you know,
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  Speaker 7: and look at fundamentals. So, you know, whether we get
• 11:31
  Speaker 7: a continuing resolution passed tomorrow, it doesn't come till Monday,
• 11:35
  Speaker 7: there'll be some volatility in the markets potentially because of it,
• 11:39
  Speaker 7: but then we'll move on.
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  Speaker 3: What do you make of the fact that the earnings
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  Speaker 3: picture is TBD for next year and that the consensus
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  Speaker 3: and then what the S and P is implying is
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  Speaker 3: pretty strong, and then you wind up having this uncertainty
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  Speaker 3: about the FED. Now, some might say it's okay because
• 11:57
  Speaker 3: earnings are going to be really good, we're gonna have deregulation,
• 11:59
  Speaker 3: and we're going to lower taxes, so yeah, we can
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  Speaker 3: justify that. But the other side is, we just don't know,
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  Speaker 3: and if rates stay stickier, as you say, that inflation
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  Speaker 3: actually increases a little bit, that that consensus might need
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  Speaker 3: to come down. Where do you stand on.
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  Speaker 7: That it might need to come down? But if we
• 12:15
  Speaker 7: look at Trump's policies, deficit spending, deregulation, which will be
• 12:21
  Speaker 7: good for US corporations across the board. Tariffs will be
• 12:26
  Speaker 7: good for some bad for others, depending on if they're
• 12:29
  Speaker 7: a multinational conglomerate bringing products in or whether it's even
• 12:33
  Speaker 7: smaller mid cap companies where their input costs will be impacted.
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  Speaker 7: But I think net net, we're still looking for a
• 12:41
  Speaker 7: good earning for good earnings growth next year, and that
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  Speaker 7: Trump policies net net will probably only benefit that.
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  Speaker 3: All right, thanks a lot, David, really appreciate. David Kudlah,
• 12:53
  Speaker 3: founder's CEO and chief investment strategist at Mainstay Capital Management Intinent.
• 12:58
  Speaker 2: You're listening to the Bloomberg and te podcast. Catch us
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• 13:12
  Speaker 3: All right, Nathan Dean was here yesterday and now he's
• 13:14
  Speaker 3: back in DC. I can't I can't keep dragged on
• 13:17
  Speaker 3: that the wholesali Thank yeah.
• 13:18
  Speaker 6: All right.
• 13:19
  Speaker 3: Nathan Dean, Bloomberg Intelligence and your policy analyst, joins us
• 13:22
  Speaker 3: now from DC. And we had a totally different conversation
• 13:25
  Speaker 3: yesterday and when it came to politics, and then today
• 13:28
  Speaker 3: it's like, oh wait, maybe there will be a shutdown
• 13:30
  Speaker 3: on Friday. Oh wait, maybe the debt ceiling is in
• 13:32
  Speaker 3: play now rather than in the summer. What is your
• 13:35
  Speaker 3: take and consensus someone's going to happen.
• 13:38
  Speaker 8: Yeah, So yesterday I said there was a twenty percent
• 13:40
  Speaker 8: chance of a government shutdown. I'm only going to go
• 13:42
  Speaker 8: to forty percent. So I think I'm out of consensus here.
• 13:44
  Speaker 8: But what I'm saying is that I think we're going
• 13:46
  Speaker 8: to have a forty percent chance of a government shutdown
• 13:48
  Speaker 8: by Monday, so tomorrow night. Obviously, the government shuts down
• 13:51
  Speaker 8: at midnight unless it continuing resolution has been passed. But
• 13:54
  Speaker 8: we've seen in the past before Congress sometimes takes the
• 13:57
  Speaker 8: weekend to figure out a deal. And I think despite
• 13:59
  Speaker 8: all the blome and the political prosting you're seeing at
• 14:02
  Speaker 8: the moment, I think a deal can be made for
• 14:04
  Speaker 8: clean CR plus, disaster AD plus potentially the one year
• 14:07
  Speaker 8: extension of the farm bill because if something doesn't happen,
• 14:11
  Speaker 8: that farm bill and the impact on farmers is going
• 14:14
  Speaker 8: to be substantial in twenty twenty five if the government
• 14:17
  Speaker 8: shuts down, and I think that's going to be what
• 14:19
  Speaker 8: finally gets this deal over the edge. But like you said,
• 14:21
  Speaker 8: the debt ceilings now involved, and there's going to be
• 14:23
  Speaker 8: a lot more political hiccups to come, certainly over the
• 14:25
  Speaker 8: next few weeks and months.
• 14:27
  Speaker 5: All right, From my perspective, the politics and that people
• 14:31
  Speaker 5: involved seem a little squirrely to me. I've got a
• 14:33
  Speaker 5: president elect and I got some civilian dude really weighing
• 14:38
  Speaker 5: in on this issue in a big way and moving markets.
• 14:42
  Speaker 5: Yet I have a president who's actually sitting in the
• 14:44
  Speaker 5: chair and I don't hear anything. What's going on in
• 14:47
  Speaker 5: debt Washington? What are you guys doing down there?
• 14:49
  Speaker 8: Yeah, so essentially what the Democrats are doing right now
• 14:51
  Speaker 8: essentially letting the Republicans try and figure out what is
• 14:54
  Speaker 8: the base case scenario. All these negotiations that you may
• 14:56
  Speaker 8: know are taking place in the House with Speaker of
• 14:59
  Speaker 8: the House Mike Johnson, and he was the one that
• 15:00
  Speaker 8: negotiated a deal that Elon Musk and then later President
• 15:03
  Speaker 8: Trump came in and said, no, we're not comfortable with.
• 15:05
  Speaker 8: So what you need right now is the Republicans to
• 15:08
  Speaker 8: come on board with an idea of a bill.
• 15:10
  Speaker 6: That will pass the House.
• 15:11
  Speaker 8: And we've even seen Senator Majority Leader Chuck Schumer say,
• 15:14
  Speaker 8: you look, from the Senate perspective, we're just gonna let
• 15:16
  Speaker 8: the House figure it out first and then we'll deal
• 15:18
  Speaker 8: with it. And that's where the dead ceiling eventually comes in,
• 15:21
  Speaker 8: because look, you can't really get a dead ceiling deal.
• 15:23
  Speaker 8: I don't think within another like say, twenty four hours.
• 15:27
  Speaker 8: These usually take weeks and months to hash out. And
• 15:29
  Speaker 8: if the Republicans decided to move forward with a two
• 15:31
  Speaker 8: year extension of the debt ceiling. More often than not,
• 15:34
  Speaker 8: Republicans also insist on cuts as a result of that.
• 15:38
  Speaker 8: So I think what will happen here is the Democrats
• 15:40
  Speaker 8: sort of way back and they say, Okay, Speaker of
• 15:42
  Speaker 8: the House, Michael Mike Johnson, you figure it out, you
• 15:45
  Speaker 8: come up with a plan, you get this plan through
• 15:47
  Speaker 8: the House, and then if that's the case, then we'll
• 15:50
  Speaker 8: move forward and we'll deal with it on the Senate side.
• 15:52
  Speaker 8: Because for everything you're talking about, just remember this has
• 15:55
  Speaker 8: to be bipartisan because you need seven Democrats. I'm sorry,
• 15:58
  Speaker 8: you're gonna need a lot of Democrats to come forth
• 16:01
  Speaker 8: and get this through on the Senate side.
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  Speaker 3: Is the debt ceiling really in play?
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  Speaker 1: You know?
• 16:06
  Speaker 6: Obviously?
• 16:06
  Speaker 8: I think President Trump when he made the statement earlier
• 16:08
  Speaker 8: today that they should abolish the debt ceiling, that's something
• 16:11
  Speaker 8: the Democrats would actually welcome. We saw Senator Elizabeth Warren
• 16:13
  Speaker 8: even say that she would support President Trump on that matter.
• 16:17
  Speaker 8: I think that was also a way for President Trump
• 16:19
  Speaker 8: potentially to give Speaker Johnson a way out, saying, look,
• 16:22
  Speaker 8: if we can't get the debt ceiling done. But from
• 16:24
  Speaker 8: the market perspective, what I would say, is the deadline
• 16:27
  Speaker 8: is not December thirty. First, that's only the date in
• 16:29
  Speaker 8: which Treasury can use extraordinary measures to keep her funding.
• 16:32
  Speaker 8: The actual X date, if you will, is sometime next summer.
• 16:36
  Speaker 8: So from the market perspective or in terms of government
• 16:38
  Speaker 8: shutdowns and debt ceilings and so forth, we're not seeing much.
• 16:41
  Speaker 6: Impact from all this political posturing at the moment.
• 16:44
  Speaker 5: What's the feeling in Washington and Nathan about the status
• 16:48
  Speaker 5: of Speaker Johnson because it feels like he's really under
• 16:53
  Speaker 5: the gun here from all side.
• 16:55
  Speaker 8: Yeah, you know, if we had had this conversation last week,
• 16:58
  Speaker 8: I'd say it's fairly comfortable of his position, but today
• 17:01
  Speaker 8: it's not. Senator Ran Paul even floated the idea of
• 17:04
  Speaker 8: potentially having Elon Musk to be the Speaker of the House,
• 17:06
  Speaker 8: because you don't have to be a member of the
• 17:08
  Speaker 8: House of Representatives to be the Speaker. Now, I don't
• 17:10
  Speaker 8: think that's going to happen, but a lot of the
• 17:12
  Speaker 8: Johnson allies, if you have been sort of questioning whether
• 17:14
  Speaker 8: or not he has the chops for the job early
• 17:17
  Speaker 8: next year, and you know that election is going to
• 17:19
  Speaker 8: take place on January third.
• 17:21
  Speaker 6: So I'm not exactly.
• 17:22
  Speaker 8: Sure, I'd be comfortable if I was in Speaker Johnson's position,
• 17:25
  Speaker 8: But that being said, I don't know anybody else who
• 17:27
  Speaker 8: wants the job.
• 17:28
  Speaker 3: Wait, but let's get back to the Elon Muslin because
• 17:30
  Speaker 3: I don't think I think I knew that, but then
• 17:32
  Speaker 3: I think I forgot it, and then now I know
• 17:33
  Speaker 3: it again. So just walk me through. So anyone can
• 17:35
  Speaker 3: be Speaker of the House, like my mom could be
• 17:36
  Speaker 3: Speaker of the House if she gets enough votes.
• 17:39
  Speaker 8: Yeah, you know, if Paul wants to get back again
• 17:41
  Speaker 8: at the government service, we can have Paul be Speaker
• 17:42
  Speaker 8: of the House.
• 17:43
  Speaker 6: You know.
• 17:44
  Speaker 8: Essentially, it's something that goes back to obviously through the
• 17:46
  Speaker 8: Constitution days and so forth.
• 17:48
  Speaker 6: But there's been a.
• 17:49
  Speaker 8: Lot of talk over the last few years about potentially
• 17:51
  Speaker 8: having President Trump become Speaker of the House. During the
• 17:54
  Speaker 8: Biden administration, obviously that didn't go anywhere. But the reason
• 17:56
  Speaker 8: why Elon Musk would not want to be Speaker of
• 17:58
  Speaker 8: the House is because, yes, you get to use the
• 18:00
  Speaker 8: bully pulpit and you get to decide what's on the floor,
• 18:03
  Speaker 8: but you also have to get into the nitty gritty
• 18:04
  Speaker 8: and manage all two hundred and twenty Republican members next
• 18:08
  Speaker 8: year when you only have a majority of five, and
• 18:10
  Speaker 8: that is an extremely difficult position when you have to
• 18:13
  Speaker 8: make tough choices like am I going to shut the
• 18:15
  Speaker 8: government down? Or am I going to extend the farm
• 18:18
  Speaker 8: bill one year and have provide all this relief to
• 18:20
  Speaker 8: the American farmer base.
• 18:22
  Speaker 6: That's a tough choice.
• 18:23
  Speaker 8: And that's why I don't think the elon musk rumor,
• 18:26
  Speaker 8: if you will, is a serious one.
• 18:28
  Speaker 5: Okay, Okay, we're still processing.
• 18:32
  Speaker 3: We're still processing. I also just feel like, I mean,
• 18:34
  Speaker 3: can you imagine like running the house, running Spear, or
• 18:37
  Speaker 3: being part of SpaceX, running your AI company, running Tesla,
• 18:41
  Speaker 3: and there's a lot going on there. Okay, so give
• 18:44
  Speaker 3: me some well, I guesually, let's go back and talk
• 18:46
  Speaker 3: about playbook. So we have learned what maybe a Trump
• 18:50
  Speaker 3: playbook for twenty twenty five then looks like is this
• 18:52
  Speaker 3: what we can start expecting?
• 18:54
  Speaker 1: Right?
• 18:54
  Speaker 3: Like the Congress does something and then musk Ramaswami and
• 18:59
  Speaker 3: Trump kind of weigh in in different ways, and then
• 19:01
  Speaker 3: that affects policy. Is this going to be the state
• 19:03
  Speaker 3: of play I.
• 19:05
  Speaker 8: Think so, I mean, obviously, you know, a lot has
• 19:07
  Speaker 8: to happen but I think you know, one of the
• 19:09
  Speaker 8: biggest issues, if you will, is if they do continue
• 19:12
  Speaker 8: to if they pass a continuing resolution that kicks this
• 19:15
  Speaker 8: into March. Now you've got a funding fight within the
• 19:18
  Speaker 8: first one hundred days of President Trump's presidency.
• 19:21
  Speaker 6: And it's usually when presidents.
• 19:22
  Speaker 8: Don't want to deal with funding because they want to
• 19:24
  Speaker 8: use their political capital on things like immigration, border potentially
• 19:28
  Speaker 8: in this case, a reconciliation package for tax extensions.
• 19:31
  Speaker 6: But if this government funding fight kicks the.
• 19:33
  Speaker 8: Canda March, now, you're going to have Elon Musk tweeting
• 19:36
  Speaker 8: out there saying, look, we need to delete the CFBB
• 19:39
  Speaker 8: or get rid of the Department of Education. And at
• 19:41
  Speaker 8: that point you are going to need seven Democrats in
• 19:43
  Speaker 8: the Senate to agree. You most likely won't, and now
• 19:46
  Speaker 8: you're going to have a government shutdown. Is that a
• 19:49
  Speaker 8: fight that President Trump wants to have within the first
• 19:51
  Speaker 8: one hundred days of his presidency.
• 19:53
  Speaker 6: We really don't know.
• 19:53
  Speaker 8: It just depends on the politics per se. But I
• 19:56
  Speaker 8: will say is is that we do think a prolonged shutdown,
• 19:59
  Speaker 8: whether it's in March or September of next year, I
• 20:02
  Speaker 8: would bet on September a prolonged shutdown of two to
• 20:04
  Speaker 8: three four wy five weeks potentially could happen, because right
• 20:08
  Speaker 8: now both parties are saying, look, you know, we're seeing
• 20:11
  Speaker 8: pretty we're sitting pretty comfortable with the positions that we have.
• 20:14
  Speaker 5: All right, let's go to what was a front page
• 20:18
  Speaker 5: topic a matter of week ago, a week or two ago.
• 20:21
  Speaker 5: Which are some of these nominations that have to get
• 20:23
  Speaker 5: sentate confirmation in January? Any update on some of the
• 20:28
  Speaker 5: more contentious ones, mister Hegseth, Tulsa Gabbard, RFK Junior, just
• 20:33
  Speaker 5: to name a few.
• 20:34
  Speaker 8: Yeah, so they're making the rounds on Capitol Hill as
• 20:36
  Speaker 8: we speak. I mean Senator Fetterman from Pennsylvania met with
• 20:40
  Speaker 8: Pete Hegseth last week, sorry, earlier this week, and rf
• 20:43
  Speaker 8: K Junior is making the rounds today. You know, I
• 20:46
  Speaker 8: would just say that, you know, I think right now
• 20:48
  Speaker 8: and for the rest of December, it's really just going
• 20:50
  Speaker 8: to be more of these like photo meet and greeps
• 20:52
  Speaker 8: and so forth like that. We're not seeing a ton
• 20:54
  Speaker 8: of pushback on Pete Hegseth like we saw a week ago.
• 20:58
  Speaker 8: But I think a lot of the far our works
• 21:00
  Speaker 8: will come down to these committee hearings and obviously these
• 21:02
  Speaker 8: nomination hearings because a lot of the tough questions are
• 21:05
  Speaker 8: going to be asked, and these are going to be
• 21:06
  Speaker 8: asked from both Republicans and Democrats, and so for somebody
• 21:09
  Speaker 8: like Tulca Gabbard, if the senior Democrat begins to really
• 21:13
  Speaker 8: question on some of those positions, things could potentially unravel.
• 21:17
  Speaker 6: But I will say, remember.
• 21:18
  Speaker 8: The Republicans are going to have fifty three in the
• 21:20
  Speaker 8: Senate next year, which means you can afford to lose four,
• 21:23
  Speaker 8: and so you know, many of these cases, I think
• 21:25
  Speaker 8: it's going to be pressure for them to withdraw because
• 21:27
  Speaker 8: the votes may be there for them to get across
• 21:29
  Speaker 8: the line.
• 21:31
  Speaker 3: Amazing. It's going to be fascinating to sort of watch
• 21:33
  Speaker 3: how all of this winds up playing out. We also
• 21:36
  Speaker 3: heard over the last well we heard it yesterday, we've
• 21:38
  Speaker 3: had about twenty four hours to digest, is that the
• 21:40
  Speaker 3: Supreme Court is going to take up that TikTok version.
• 21:44
  Speaker 3: What do we make of that? Like, how do you
• 21:46
  Speaker 3: think that's going to play out in DC?
• 21:49
  Speaker 8: Yeah, So my colleague Matt Schattennelman and I were talking
• 21:51
  Speaker 8: about this yesterday and I really raked his head on this.
• 21:54
  Speaker 8: You know, This is a question of you know, this
• 21:56
  Speaker 8: law was scheduled to go into effect January nineteenth, one
• 22:00
  Speaker 8: day before the inauguration, and there wasn't really I mean,
• 22:02
  Speaker 8: just remember we're talking about a law here, and so
• 22:05
  Speaker 8: if you want to undo the law, you either need
• 22:07
  Speaker 8: the courts to come in and say it's no constitutional
• 22:09
  Speaker 8: or Congress has to pass a new law. And so
• 22:12
  Speaker 8: there isn't really much of a magic wand that President
• 22:14
  Speaker 8: Trump could do on day one, unless the Supreme Court
• 22:17
  Speaker 8: were to give that magic wand to him. He could
• 22:19
  Speaker 8: certainly say the Department of Justice, yes, you don't have
• 22:22
  Speaker 8: to enforce this. But from the Apple perspective or any
• 22:24
  Speaker 8: other company that offers it on their app store, you know,
• 22:27
  Speaker 8: that's actually not a very comfortable position because you want
• 22:30
  Speaker 8: to essentially be able to say that President Trump can't
• 22:33
  Speaker 8: change his mind three months from now, or a new
• 22:35
  Speaker 8: Democratic administration four years now could say to Apple, look,
• 22:38
  Speaker 8: we understand that you know you've been operating against the law.
• 22:41
  Speaker 6: Here's a multi billion dollar enforcement action for your problems.
• 22:43
  Speaker 8: So the Supreme Court case is going to be extremely
• 22:46
  Speaker 8: key to whether or not Apple gets any of this
• 22:48
  Speaker 8: clarity going forward, and what essentially the law details.
• 22:52
  Speaker 5: All right, Nathan, thank you so much for joining us.
• 22:54
  Speaker 5: Nathan Dean, He's our go to person don in Washington,
• 22:56
  Speaker 5: d C. As it pertains to all that policy stuff there,
• 23:00
  Speaker 5: and I think we're gonna be talking a lot to
• 23:02
  Speaker 5: him in the coming days, weeks, and months and maybe
• 23:04
  Speaker 5: the next four years. Nathan Deane, Senior Policy alis for
• 23:07
  Speaker 5: Bloomberg Intelligence. He is based in our Washington DC bureau.
• 23:10
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• 23:18
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