Latest / Balance of Power / President Trump Denies US Munitions Shortage, Tension with Hegseth

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President Trump Denies US Munitions Shortage, Tension with Hegseth · Balance of Power

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Speaker 2: The oil markets and markets overall, of course, are keed
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Speaker 2: in to any development when it comes to Iran in
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Speaker 2: the Straight of four News, and while Ron says a
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Speaker 2: deal at least in principle has been reached with them
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Speaker 2: on over transit in and out of the Straight of
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Speaker 2: four News on a temporary basis, it's not totally clear
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Speaker 2: when that will be finalized and what role the US
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Speaker 2: will play, and how this factors into the pursuit of
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Speaker 2: potentially a wider agreement that would be inclusive of limits
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Speaker 2: on Iran's nuclear program. Of course, President Trump still maintains
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Speaker 2: that that is the goal here and that there will
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Speaker 2: be a deal, that he'd rather make a deal, as
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Speaker 2: we heard from President Trump as he spoke in Las Vegas, Nevada, yesterday.
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Speaker 3: I'd rather make a deal because I don't want to
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Speaker 3: kill people. We were all set for the biggest attack
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Speaker 3: since world War two, and they called me and they said, please,
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Speaker 3: don't do it.
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Speaker 4: Let's talk.
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Speaker 3: And then they said, we never said that, but we
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Speaker 3: are talking. Let's see what happens. As soon as this
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Speaker 3: situation ends with Iran oil is going to go down
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Speaker 3: to the floor, gasoline's going.
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Speaker 4: To go down.
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Speaker 5: Not much has progressed since we talked about this yesterday. Well,
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Speaker 5: maybe I should clarify that, because not much has progressed
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Speaker 5: with the US. Iran and Oman continue talking and apparently
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Speaker 5: have a deal in principle. We saw this in the
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Speaker 5: works yesterday. This apparently is about to emerge now, finalizing
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Speaker 5: a draft agreement to reopen the Strait of Hormuz and
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Speaker 5: give Iran oversight of the waterway. We'll see how long
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Speaker 5: this lasts. Jeff Mason joins US now Bloomberg White House correspondent,
1:50
Speaker 5: delighted to say he's in studio with US today. We
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Speaker 5: don't have, at least yet any open events with the
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Speaker 5: President where he might weigh in on this. Do we
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Speaker 5: expect the administration would accept a deal? I just described
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Speaker 5: good question.
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Speaker 6: I mean, particularly the part about Iran having control over
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Speaker 6: the strait is something that the President has vocally opposed
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Speaker 6: and said that he would not support that. He's also
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Speaker 6: been pretty vociferous in saying that Iran should not be
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Speaker 6: able to charge any fees, and he said, without really
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Speaker 6: indicating how, that if any fees were going to be charged,
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Speaker 6: it would be the United States that would do that.
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Speaker 6: I'll propos his events. He does have an event tonight
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Speaker 6: in the Rose Garden at seven o'clock that reporters are
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Speaker 6: going to be able to go to, So maybe he'll
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Speaker 6: say something about it then.
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Speaker 2: Tell the Olympians Team USA exactly his grand plans in
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Speaker 2: the Middle East. Do we know, Jeff, whether or not
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Speaker 2: the US blockade of the Strait is going to be
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Speaker 2: an ultimate factor here, because of course, in the original
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Speaker 2: memorandum of understanding that is obviously well to the wayside now,
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Speaker 2: the agreement was, yes, the US would end the blockade
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Speaker 2: in order for the Strait to be open. Could these
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Speaker 2: things be contingent.
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Speaker 4: On one of them?
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Speaker 6: It seems like they could. And that's something that Iran
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Speaker 6: has certainly said it wants, is for the US to
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Speaker 6: take its ships out.
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Speaker 5: Of that area.
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Speaker 6: But the President has maintained that President Presidence the United
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Speaker 6: States has maintained that presence in large part to give
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Speaker 6: him continued options with that blackcade, and just in general
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Speaker 6: having forces in the region so that he can continue
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Speaker 6: to make the threats even when he doesn't follow through
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Speaker 6: on them.
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Speaker 5: Wait, really something. There are some confusing takes on whether
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Speaker 5: there would be tolls or not. If you call it
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Speaker 5: a service fee as Iran is doing, is it still
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Speaker 5: a toll?
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Speaker 6: I mean, I guess it depends on whether you care
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Speaker 6: about the wording or not. But if money changes hands
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Speaker 6: and money is going into Iran's coffers, that seems like
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Speaker 6: a toll to me. But whether or not it's called
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Speaker 6: a toll or called something else, it has to do
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Speaker 6: with money, with money going into their coffers, and that
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Speaker 6: I don't think we can underscore enough. Is a shift
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Speaker 6: from six months ago, right, I mean, this is and
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Speaker 6: the President was so critical of President Obama's agreement with
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Speaker 6: Iran and the agreement that was made under his tenure
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Speaker 6: because of some of the money that ended up being
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Speaker 6: freed up for Iran to use. In the long run,
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Speaker 6: If this deal goes through and that money, this becomes
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Speaker 6: a revenue stream that might lead to some political criticism
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Speaker 6: of President Trump as well.
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Speaker 2: A revenue stream potentially to the tune of billions of
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Speaker 2: dollars a lot of my year, no doubt. Can I
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Speaker 2: also ask you, Jeff, we just got this true social
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Speaker 2: post from the President pushing back on reporting in the
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Speaker 2: Washington Post suggesting he fully stands behind his Defense Secretary
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Speaker 2: Pete Hegseth. He's previously pushed back on the idea that
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Speaker 2: the US is running low on munitions. What is actually
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Speaker 2: known here in terms of the US's remaining capability.
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Speaker 6: Well, there's certainly been a lot of reporting about a
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Speaker 6: lack of munitions or running out, and so seems like
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Speaker 6: there's some there there, even though the President has dismissed it.
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Speaker 6: I would add, though, to that a caveat that he's
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Speaker 6: dismissed it before. But also I think he was on
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Speaker 6: Air Force one when he was asked about this not
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Speaker 6: too long ago, when he also said I wish we
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Speaker 6: had more to me. That seemed like the President speaking
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Speaker 6: the quiet part out loud. Even as he dismiss reports
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Speaker 6: that he's not happy about. He also is confirming the
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Speaker 6: fact that the coverard is a little bit bare, at
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Speaker 6: least bearer.
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Speaker 5: Than he would probably posted about. This guy's on truth
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Speaker 5: Social large amounts are being manufactured and shipped to the
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Speaker 5: US as needed, referring to massive amounts of munitions, and
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Speaker 5: Jeffrey said, the leakers of these treason his statements are
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Speaker 5: being hunted down. Is he talking about journalists or people
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Speaker 5: in the Pentagon or.
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Speaker 6: Well, good question, possibly both. I don't know the answer
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Speaker 6: to that question. He has used the word treason is
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Speaker 6: and he was using the word treasonis in the post
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Speaker 6: right before I came on. With regard to the reporting,
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Speaker 6: which of course we object to. I mean, it's the
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Speaker 6: First Amendment right of journalists and these organizations to report
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Speaker 6: the news. But he has first for sure gone after
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Speaker 6: journalists and gone after leakers in a way that he
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Speaker 6: did not in the first term. And I might add
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Speaker 6: also in the first term, he was often a source
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Speaker 6: for people, and that's something that dates back to his
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Speaker 6: time as in New York business.
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Speaker 2: Yeah, while you were there, and you would know, well,
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Speaker 2: he was also first hand source for a lot of
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Speaker 2: this administration. He was picking up the phone a lot.
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Speaker 2: I feel like that's opening less frequent. We weren't getting
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Speaker 2: the constant just the phone with the president.
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Speaker 6: I have, and he goes through periods where he takes
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Speaker 6: our calls on the periods where it's a little less frequent.
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Speaker 5: Yeah, goes to voicemail everything, voicemail sometimes.
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Speaker 2: All right, Jeff Mason covering the White House for us
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Speaker 2: and here with us in our Washington, d C studio today. Jeff,
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Speaker 2: thank you very much for further insight into the President's
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Speaker 2: calculation and position he finds himself in when it comes
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Speaker 2: to Iran. We turn now to Richard Haas, Council on
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Speaker 2: Foreign Relations President emeritus, who's here with us now on
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Speaker 2: Bloomberg TV and Radio. Richard, welcome to balance of power
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Speaker 2: when we consider uh I guess first, the most immediate
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Speaker 2: deal that seems to be on the table between Iran
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Speaker 2: and Oman over the Straight of four News. Is it
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Speaker 2: one you feel can be relied on. Is it a
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Speaker 2: good one?
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Speaker 7: I'm not sure anything can be relied on in the
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Speaker 7: mid least the question whether it's a good one. The
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Speaker 7: question is whether it's a good enough one or whether
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Speaker 7: it's the least bad one. And if the goal is
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Speaker 7: to get the Straight of horm moves open, which it
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Speaker 7: should be before the war, about one fifth of the
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Speaker 7: world's oil and gas travel through it, plus a lot
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Speaker 7: of other cargo.
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Speaker 4: The idea that Iran would have a larger role now
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Speaker 4: than it did. That I think is inevitable.
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Speaker 7: Wars of consequences, Iran will have a larger role even
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Speaker 7: without charging a toll or fee or whatever you want
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Speaker 7: to call it. But yeah, I think it's something that's acceptable.
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Speaker 7: We'll have to drop our blockade. And my view is
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Speaker 7: we should drop our blockade so long as Iran lets
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Speaker 7: others use the Strait of Hormuz. We'll have to let
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Speaker 7: them sell some oil. As long as most of the
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Speaker 7: other sanctions stay in place. I think that's probably as
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Speaker 7: good as we can expect at this point.
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Speaker 5: Richard, it's great to have you back. What do you
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Speaker 5: make of this move strategically speaking, by Iran to just
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Speaker 5: stop dealing with the US and make a deal with
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Speaker 5: its neighbor Oman. Is this shrewd? What does the administration
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Speaker 5: choose for its next play?
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Speaker 7: What I would do is actually take a page out
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Speaker 7: of Iran's book. This is such a poisonous quality to
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Speaker 7: US Iranian interaction. I would say we actually ought to
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Speaker 7: multilateralize this. It should not simply be Iran and Oman.
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Speaker 7: It should not simply be Iran in the United States,
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Speaker 7: the world, and certainly all the countries of the region
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Speaker 7: have a stake in transit through the Strait of Ormus.
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Speaker 7: So what I would like us to do is enlist
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Speaker 7: others diplomatically. Get the Arab states of the region, who
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Speaker 7: have an enormous stake in what goes through there. Maybe
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Speaker 7: get the Europeans, get the Asians, who people from Asia,
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Speaker 7: who import enormous amounts of energy from the Middle East,
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Speaker 7: and have them all involved, so that way it's not
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Speaker 7: simply Iran against the United States. I want it to
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Speaker 7: be in many ways, Iran against a big chunk of
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Speaker 7: the world.
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Speaker 2: Well, and almost as if they could hear you a
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Speaker 2: US official now tele Bloomberg that Hormus is an international
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Speaker 2: waterway and that no party controls Hormus lanes or transiting,
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Speaker 2: and that temporary Hormus roots will be without impediment. So
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Speaker 2: it's unclear if that's maybe signaling that the US isn't
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Speaker 2: necessarily liking what it's hearing here on the Iran and
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Speaker 2: Omani front. Richard. But to your point about this being
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Speaker 2: a global concern, who is it that needs to initiate
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Speaker 2: such a thing if we are to get all of
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Speaker 2: these different parties at the table. Is that a US
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Speaker 2: led effort. Is that a UN led effort? And why
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Speaker 2: would it be an effort that Iran might be willing
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Speaker 2: to cooperate with?
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Speaker 7: I would say to the US, could be European lad
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Speaker 7: could be countries again that of the region could be
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Speaker 7: Saudi and others led.
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Speaker 4: Iran may not like it.
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Speaker 7: Again, they have no stake in opening the Strait of Hormuz,
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Speaker 7: certainly so for two reasons, they want their own oil
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Speaker 7: and gas to be exported, and second of all, ultimately
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Speaker 7: they want to collect a fee. So yeah, this has
10:00
Speaker 7: become a big war wartime objective of there. So I
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Speaker 7: don't think this is uh, this is impossible by any means,
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Speaker 7: So sure I would push short. Again, I don't think
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Speaker 7: we have a whole lot of leverage. And all these
10:13
Speaker 7: threats of military force you had the president on a
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Speaker 7: few minutes ago, quite honestly are empty. Iran is absorbed
10:20
Speaker 7: an awful lot of punishment to little Avail, and we
10:24
Speaker 7: can't escalate against Iran's energy infrastructure because the last thing
10:27
Speaker 7: in the world we want them to do is to
10:30
Speaker 7: attack the energy on water infrastructure of the neighboring countries.
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Speaker 7: So these strengths are quite again there, they're empty. And
10:36
Speaker 7: all they do is raise questions about American credibility. So
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Speaker 7: I would put them aside, and I would, you know,
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Speaker 7: I would focus on other things, some diplomacy. I focus
10:45
Speaker 7: on longer term steps to reduce the importance of the
10:48
Speaker 7: Strait of horm moves. We should encourage new ports, new pipelines,
10:53
Speaker 7: increase production of oil and gas from other parts of
10:55
Speaker 7: the world. We ought to be taking steps to improve
10:58
Speaker 7: the ability of local countries to defend themselves. And the
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Speaker 7: short one, we're going to have to accept and outsize
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Speaker 7: the Iranian roll again wars of consequences, But over time
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Speaker 7: we ought to be focused on reducing Irani and leverage
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Speaker 7: over the neighbors and over the Strait, and then turn
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Speaker 7: the focus to their nuclear program that's ultimately as important,
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Speaker 7: even more important than what happens with the Strait.
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Speaker 5: Well, we know you're no stranger to Middle East wars, Richard,
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Speaker 5: with your book War of Necessity, War of Choice, which
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Speaker 5: I think I see behind you there. I'm curious your
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Speaker 5: take on this argument over munitions. The Washington Post today,
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Speaker 5: the President's very upset about it, talking about the President
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Speaker 5: boiling over at Camp David yelling at Pete Hegseth about
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Speaker 5: the lack of munitions. We know that we have run
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Speaker 5: short and completely empty. According to Reuter's of attack of missis,
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Speaker 5: missiles and other long range missiles are simply expended. Is
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Speaker 5: this a result of our lack of defense industrial base
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Speaker 5: or a war that has been mismanaged?
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Speaker 7: Well, this is an unfortuate, a war that never should
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Speaker 7: have been ford. But you're exactly right. What it really
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Speaker 7: reflects is that we don't have the ability to produce
12:07
Speaker 7: significant numbers of weapons at reasonable prices in small amounts
12:12
Speaker 7: of time.
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Speaker 4: We have a defense establishment.
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Speaker 7: When Dwight Eisenhower gave his Farewell address, he talked about
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Speaker 7: a military industrial complex. We have a military industrial legislative complex.
12:24
Speaker 4: And by the time.
12:24
Speaker 7: These three institutions get together, the Congress, the large firms,
12:29
Speaker 7: and the US military establishment, we are inefficient and we're
12:34
Speaker 7: not nearly innovative enough in the fact that countries like
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Speaker 7: Iran are producing large numbers of these effective systems.
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Speaker 4: Look at what Ukraine is doing.
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Speaker 7: Ukraine is producing what sixty seven million drones a year
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Speaker 7: for tens of thousands of dollars each.
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Speaker 4: Why aren't we doing that?
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Speaker 7: So? Actually, I think this highlights a scandal, if you will,
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Speaker 7: that's been biparties in.
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Speaker 4: It's happened over decades.
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Speaker 7: We've got to revamp and reorient our manufactur lecturing base
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Speaker 7: to essentially position US for contemporary warfare. And this war
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Speaker 7: is a blated wake up call.
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Speaker 2: Well, you mentioned Ukraine, Richard, in our final moment with you.
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Speaker 2: This lack of munitions and defensive ones, especially that the
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Speaker 2: US experiencing, does have consequence for Ukraine, right which desperately
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Speaker 2: needs these defensive interceptors, as evidenced by the missile strikes
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Speaker 2: we've seen Russia be able to conduct in civilians dying
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Speaker 2: in Kiev. What does this ultimately mean for Ukraine's ability
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Speaker 2: to try to last here to get to a diplomatic outcome.
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Speaker 7: Ukraine is almost defenseless against Russian ballistic missiles that are
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Speaker 7: produced maybe at the rate of about one hundred a month.
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Speaker 7: So one thing is can we help Ukraine target the
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Speaker 7: missile production plants. That's one thing, and two Ukraine has
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Speaker 7: to keep attacking Russia in crimea its energy infrastructure ultimately
13:53
Speaker 7: to make Russia come to the point where it has
13:56
Speaker 7: to think about a ceasefire that even though it can
13:59
Speaker 7: inflict pain on Ukraine, it also will have to suffer
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Speaker 7: enormous consequences itself. That is potentially the preconditions of getting
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Speaker 7: this war to move towards the ceasefire.
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Speaker 4: We ought to help Ukraine get to that.
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Speaker 2: Point, all right, Richard Haas and the Council of Foreign
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Speaker 2: Relations or he's President Emeritis, thank you so much for
14:16
Speaker 2: joining us on Balance of Power.
14:20
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Speaker 2: The markets of course hopefully watching us here on Bloomberg
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Speaker 2: TV and listening on Bloomberg Radio. But I'm sure they
14:42
Speaker 2: also are watching President Trump's True Social Feed, especially if
14:45
Speaker 2: you're one of those who's paying for early access to
14:48
Speaker 2: True Social API, hoping to get an edge on whatever
14:50
Speaker 2: the President's going to announce that could be market moving.
14:53
Speaker 2: I'm not sure that his latest True Social post Joe
14:56
Speaker 2: would fall into the market moving category. Is it reiterates
14:59
Speaker 2: a lot of the same when it comes to iron
15:01
Speaker 2: saying then it can never have a nuclear weapon. Things
15:04
Speaker 2: are going very well. But really this post is about
15:07
Speaker 2: pushing back on what the President is describing as fake
15:09
Speaker 2: news reporting in the Washington Post, which he calls treasonous,
15:15
Speaker 2: as it detailed an alleged dust up between the President
15:18
Speaker 2: and the Defense Secretary Pete headset that Camp David over
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Speaker 2: the munition's issue. The President says that is completely false, unfounded,
15:28
Speaker 2: and that he's extremely happy with the job that Pete
15:31
Speaker 2: Hegseth is doing, saying that he is highly respected within
15:34
Speaker 2: the military and has made tremendous improvements.
15:37
Speaker 5: The rumor was started, he writes, by the Washington Compost.
15:41
Speaker 5: You get that it's pretty good, one of the worst
15:44
Speaker 5: media outlets in the business, despite our telling them their
15:47
Speaker 5: story is completely false. The story is a ripper to
15:51
Speaker 5: read it. I can't imagine what it would have been
15:54
Speaker 5: like to be in the room at Camp David. Let's
15:55
Speaker 5: see how our panel feels about this, but want to
15:57
Speaker 5: get to the latest headlines surrounding the war and the
16:00
Speaker 5: pushback from the President of the United States. Bloomberg Politics
16:04
Speaker 5: contributors Rick Davis and Jeanie Shanzano joined now. Rick is
16:07
Speaker 5: our Republican strategist and partner at Stone Court Capital. Genie
16:10
Speaker 5: is our democratic analyst and democracy visiting fellow at Harvard
16:13
Speaker 5: Kennedy School's Ash Center. When you read the story, Genie,
16:18
Speaker 5: it does make you wonder how frustrated the president must
16:21
Speaker 5: have been boiling over is the language they use a
16:23
Speaker 5: camp David demanding answers from Meg Seth on why he
16:26
Speaker 5: had been misled about our levels of munitions, which an
16:31
Speaker 5: issue that heg Seth apparently told him quote had been
16:34
Speaker 5: fixed unquote you can't fix that less than a couple
16:37
Speaker 5: of years.
16:38
Speaker 8: Right.
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Speaker 5: It takes a while to make these missiles, doesn't it.
16:41
Speaker 5: It does?
16:42
Speaker 9: And these are long term problems, even pre dating obviously
16:47
Speaker 9: Donald Trump's administration. Although, of course when you go to war,
16:51
Speaker 9: whether you go into Iran last year, or you go
16:54
Speaker 9: to Venezuela, or you go to Iran again this year,
16:58
Speaker 9: when you send munitions to Ukraine as we have done,
17:01
Speaker 9: all of these things impact the stockpile. And can anybody
17:06
Speaker 9: believe the President wouldn't be frustrated by this situation. This
17:10
Speaker 9: was a war in Iran he thought was going to
17:12
Speaker 9: be over in twenty four hours, a couple of days,
17:14
Speaker 9: maybe a couple of weeks. It's dragging down on it's
17:18
Speaker 9: pulling down his support amongst not just Democrats obviously, but
17:23
Speaker 9: independence Republicans. Is base costs are rising. All of these
17:28
Speaker 9: things are the result of what he has done here
17:31
Speaker 9: with Iran. And of course he's going to be looking
17:34
Speaker 9: to his team and Pete hag Seth is leading it
17:36
Speaker 9: and saying what happened here, because this is not the
17:39
Speaker 9: position I want to be in as we are less
17:41
Speaker 9: than ninety days now to the midterm.
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Speaker 2: Well, and when we consider the position that the president
17:48
Speaker 2: is put in with these kinds of reports, rick not
17:51
Speaker 2: even just about the interpersonal issues perhaps with him and
17:54
Speaker 2: members of his administration, but with the very question around
17:58
Speaker 2: the US is remaining munition, and this is a national
18:01
Speaker 2: security question. It's a question that I'm sure has influence
18:06
Speaker 2: on minds in Tehran as they're considering whether or not
18:08
Speaker 2: now is really the time to be making a deal
18:10
Speaker 2: with the United States. Is he right to be upset
18:13
Speaker 2: by the suggestion that we are at a strategic disadvantage militarily?
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Speaker 8: Yeah, I don't think it's a big secret that we've
18:22
Speaker 8: used up a lot of our stockpile. Has been widely reported,
18:25
Speaker 8: really ever since the first four days of the attacks
18:28
Speaker 8: on Iran, and you know, we've talked about the missile
18:32
Speaker 8: math for quite some time and that you know, what
18:34
Speaker 8: does Iran have and what do we have and how
18:36
Speaker 8: does it compare? So this is nothing new. I really
18:41
Speaker 8: don't think it has that level of a strategic importance.
18:44
Speaker 8: Probably more important to the Ukraine conflict with Russia than
18:50
Speaker 8: it has to do with Iran.
18:51
Speaker 5: We've got lots of.
18:52
Speaker 8: Jet fighters that can deliver ordinance anytime we want on
18:56
Speaker 8: the Iranians, and we've done that repeatedly, even as early
18:59
Speaker 8: as life.
19:00
Speaker 4: Two weeks ago.
19:01
Speaker 8: So it's not like we don't have things that can
19:04
Speaker 8: replace that. It's the defensive stuff that the Ukrainians need
19:08
Speaker 8: that were short of that they can't replicate, you know,
19:11
Speaker 8: and therefore the deal gets struck with Zelenski, you know
19:15
Speaker 8: that what make your own, We'll give you a license
19:17
Speaker 8: for it. The problem is he's got to develop an
19:20
Speaker 8: industrial capability to do that. Look fundamentally, Richard Hass said it.
19:25
Speaker 8: He was one hundred percent right. We have a problem
19:28
Speaker 8: with manufacturing in the defense industrial congressional complex. This has
19:33
Speaker 8: been talked about for decades. John McCain used to rail
19:36
Speaker 8: about this twenty years ago, and the bottom line is
19:40
Speaker 8: that's probably what's more important that if Secretary Hegsith had
19:46
Speaker 8: represented to Donald Trump that that problem was cured, he's kidnaped.
19:50
Speaker 8: And we've now seen repeated examples of his cabinet secretaries
19:54
Speaker 8: Bergham on the Eclipse pool, Hegsith on this basically tell
20:01
Speaker 8: him what he wants to hear and hope that nobody
20:03
Speaker 8: walks through the front door saying hey, this is not true.
20:08
Speaker 5: Well, well that's quite an answer, Rick. And when you
20:11
Speaker 5: look at the actual numbers, Genie, in the first month
20:14
Speaker 5: of fighting alone, the US fired more than eight hundred
20:17
Speaker 5: and fifty Tomahawk cruise missiles, more than a thousand Patriot
20:22
Speaker 5: and Terminal high Altitude Area Defense System missiles THAD system missiles.
20:28
Speaker 5: We fired more than thirteen hundred of the army's tactical
20:31
Speaker 5: ballistic missiles in the initial weeks of fighting, and as
20:34
Speaker 5: Reuters has reported, our stockpile of attack ems, the short
20:38
Speaker 5: range missile and demand by Ukraine as well is basically
20:42
Speaker 5: drained to the extent that there are none left. You
20:46
Speaker 5: do start wondering if Richard Haas is onto something when
20:51
Speaker 5: he calls this a bipartisan scandal, do you agree.
20:56
Speaker 9: One thousand percent, and it predates Donald Trump, as Rick
21:01
Speaker 9: was just talking about. It is something that is a
21:05
Speaker 9: huge problem for US security. You know, I think the
21:09
Speaker 9: American people are right to ask something, Joe, which is
21:12
Speaker 9: that we are spending more on defense and our military
21:17
Speaker 9: than any other country in the world and in human history.
21:22
Speaker 9: Next year, they're asking for one point five trillion dollars.
21:26
Speaker 9: And we find ourselves in this position, the American people,
21:31
Speaker 9: for all of us, that is just writ large of
21:35
Speaker 9: an inability to secure ourselves, to manage ourselves. We should
21:40
Speaker 9: be doing far better. This is part and parcel of
21:44
Speaker 9: what people don't like about Washington, DC. And you know,
21:47
Speaker 9: the President, as much as he doesn't own this particular issue,
21:51
Speaker 9: it's exacerbated by going into Iran certainly, and of course
21:57
Speaker 9: he's made his bed when it comes to being told
22:01
Speaker 9: the truth by his cabinet members. He does not want
22:04
Speaker 9: to hear the truth. He has surrounded himself by people
22:08
Speaker 9: who are not experts, but people who are willing to
22:11
Speaker 9: tell him what he wants to hear and to flatter him.
22:14
Speaker 9: We hear it every time he holds these cabinet meetings
22:16
Speaker 9: live on TV. That is a problem that he has
22:20
Speaker 9: given how he has structured his cabinet this time around,
22:23
Speaker 9: and he has a right to be angry and mad
22:26
Speaker 9: and frustrated. But it is certainly a lot of blame
22:29
Speaker 9: to go around in this administration and previous administrations. And
22:33
Speaker 9: what there's very little of is any answer out of
22:36
Speaker 9: Congress or anybody who is thinking about putting their hat
22:39
Speaker 9: in the ring to lead this country as to how
22:41
Speaker 9: we get out of this mess. It's an economic and
22:44
Speaker 9: a security disaster for the United States, and it makes
22:47
Speaker 9: us vulnerable around the world, not just in Iran and
22:50
Speaker 9: not just.
22:51
Speaker 2: In Europe, but when it comes to Iran specifically, of
22:56
Speaker 2: Rick in the genie's words, find ourselves in a mess
23:00
Speaker 2: that we're struggling to get out of. Iran says it's
23:02
Speaker 2: reached a deal in principle with Oman to reopen at
23:05
Speaker 2: least partially. The straight of horror moves unclear. What role
23:09
Speaker 2: of the United States is playing. Doesn't seem to be
23:13
Speaker 2: a permanent deal. And I wonder if you see it
23:16
Speaker 2: as one that at least is good enough for now,
23:19
Speaker 2: if it gets energy flowing more threely through the street
23:22
Speaker 2: once again, or if it just underscores the notion that
23:24
Speaker 2: Iran has now much more control over an international waterway
23:28
Speaker 2: than it did before.
23:30
Speaker 10: Well, like most people, I think we've got more unanswered questions,
23:33
Speaker 10: and we do questions about this potential deal between Iran
23:37
Speaker 10: and Oman. It's certainly not a deal between Iran and
23:41
Speaker 10: the United States. And we've seen reporting just in the
23:44
Speaker 10: last few minutes about how the administration is basically saying
23:49
Speaker 10: we're not going to support any deal where they charge
23:52
Speaker 10: a fee or a toll for shift coming in or
23:56
Speaker 10: leaving the Gulf of Four Moose. So it's kind of
23:59
Speaker 10: hard to to see how all of this is anything
24:02
Speaker 10: other than another bad day at the work at the office,
24:07
Speaker 10: you know, in the war against Iran. The fact that
24:10
Speaker 10: we are even party to the conversations, I mean, what's
24:13
Speaker 10: happened to our negotiators and all our middle men that
24:18
Speaker 10: somehow now this is all being done by Oman and
24:22
Speaker 10: around two interested parties. To the economic upside of charging fees,
24:26
Speaker 10: I mean, like it's out of control, and so I
24:31
Speaker 10: see nothing positive coming out of this. It doesn't address
24:34
Speaker 10: any of the sticky issues that we care about, and
24:36
Speaker 10: it changes the complexity of an international waterway that has
24:39
Speaker 10: served the economic community around energy for decades.
24:44
Speaker 8: That's a bad change and a horrible outcome to this incursion.
24:49
Speaker 5: Genie, in our remaining moment, I ask you the question
24:52
Speaker 5: that Rick just asks, and your thoughts on.
24:56
Speaker 9: This, you know, I think there's no other option. This
25:01
Speaker 9: is what we are left with. You know, when it
25:04
Speaker 9: comes to tolls, we signed ANMOU that gave around the
25:08
Speaker 9: ability to impose tolls. After sixty days we entered a
25:11
Speaker 9: war where everybody who has studied this new they would
25:14
Speaker 9: close the strait successfully. And what has happened now is
25:18
Speaker 9: probably forever now, or at least in the short term.
25:23
Speaker 9: Iran's control over the Strait is going to be to
25:26
Speaker 9: such an extent that we could have never imagined. And
25:29
Speaker 9: this is why people didn't want to go into Iran
25:32
Speaker 9: in the first place.
25:33
Speaker 5: How have we ended up on the sidelines of these
25:35
Speaker 5: talks though? Where are our negotiators?
25:38
Speaker 9: Well, we have no role here because we have Iran
25:43
Speaker 9: with control of the strait. We can't bomb our way
25:45
Speaker 9: out of this thing. They and Oman, at least according
25:48
Speaker 9: to the MOOU, had a right to enter these negotiations
25:51
Speaker 9: and there's not much we can do about it now.
25:53
Speaker 9: Our best bet is to let them do this, get
25:56
Speaker 9: the channels open and get energy moving. That's the best week.
26:00
Speaker 2: And hope for now, all right, Geenie Shanzena and Rick Davis,
26:05
Speaker 2: Bloomberg Politics contributors in our political panel today.
26:07
Speaker 9: Thank you both.
26:08
Speaker 1: You're listening to the Bloomberg Balance of Power podcasts. Catch
26:12
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26:15
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26:28
Speaker 2: We're keeping an eye on Capitol Hill because the clock
26:30
Speaker 2: is ticking. Recess is looming. The jet fumes are in
26:33
Speaker 2: the air, unless they're not for the United States Senate,
26:36
Speaker 2: which of course trying to get out of town for
26:37
Speaker 2: a five week extended August recess. But the to do
26:41
Speaker 2: list is quite long before that, and the Senate Majority
26:45
Speaker 2: Leader John Thune hasn't budged really on how much he
26:47
Speaker 2: would like to accomplish before he lets the chamber move
26:50
Speaker 2: on to their fundraising and vacations. We have a cr
26:54
Speaker 2: and continuing resolution to keep the government funded on the table.
26:57
Speaker 2: The confirmation of Attorney General Todd Blanche, which may be
26:59
Speaker 2: get it's easier now that Senator Reuben Diego, a Democrat,
27:02
Speaker 2: is going to be absent due to his wife's appendix emergency.
27:07
Speaker 2: Evidently that does a math favor for Republicans. We have
27:10
Speaker 2: questions as well around whether or not they will try
27:13
Speaker 2: to advance a budget Resolution for Reconciliation three point zero.
27:17
Speaker 2: I'm missing a few things here. Russia Sanctions Clarity Act.
27:21
Speaker 5: We need a bet well we ring a bell for
27:22
Speaker 5: each of these. It's absurd they're not going to get
27:25
Speaker 5: all of this done. The question is could they get
27:27
Speaker 5: some of it done? And the sort of going thought
27:30
Speaker 5: here in Washington at the moment is probably not. Maybe
27:33
Speaker 5: everyone just leaves town and it all is waiting for
27:37
Speaker 5: them when they come back. I'll remind you this is
27:38
Speaker 5: a five week August recess. I'm guessing this feeling is
27:44
Speaker 5: familiar to Patrick McHenry, our Bloomberg Politics contributor, former Republican
27:49
Speaker 5: congressman from North Carolina, former Chair of the House Financial
27:52
Speaker 5: Services Committee and Speaker emeritus, is with us. Great to
27:56
Speaker 5: see you, mister chairman. What do you think it's the
28:00
Speaker 5: Upper Chamber? They're all going to just go to the
28:01
Speaker 5: airports tonight and go home.
28:03
Speaker 8: Right, of course not now.
28:05
Speaker 11: Look, I mean this is so much of what happens
28:08
Speaker 11: in the Senate is about who's in the majority and
28:11
Speaker 11: what they put on the calendar. The calendar is then
28:13
Speaker 11: dictated about by events. Life events, your reference to center,
28:18
Speaker 11: Diego's wife had an emergency appendectomy. Life will overtake the control. Yes,
28:28
Speaker 11: so we wish are a fast and good recovery to
28:34
Speaker 11: the Iago family. But life events do overtake what is
28:38
Speaker 11: possible for these legislative majorities. And they're both so narrow
28:42
Speaker 11: in both the House and the Senate, and they've got
28:45
Speaker 11: a major to do list to resolve. So it all
28:48
Speaker 11: comes down to the slimmest of margins for these major decisions.
28:52
Speaker 11: But this is how the Senate works. They will get
28:55
Speaker 11: more done in a ten day period of time than
28:57
Speaker 11: they've gotten done over the last four months. But that
29:02
Speaker 11: also cleans out the barn and they can come back
29:05
Speaker 11: in the fall and have a more methodical approach to
29:08
Speaker 11: the September thirtieth government funding deadline by clearing the continued resolution. Now,
29:14
Speaker 11: so some of this is making life better in the fall,
29:19
Speaker 11: but much of it is about cleaning up what has
29:21
Speaker 11: been left undone over the last few months.
29:26
Speaker 2: I must correct myself, because apparently Senator is not planning
29:29
Speaker 2: on missing the Blanche votes specifically, after warning he might
29:32
Speaker 2: have to miss some votes and have attendance issues in
29:36
Speaker 2: the Senate, he says, I will not be missing the
29:39
Speaker 2: vote on Blanche. So I guess now, if you're in
29:42
Speaker 2: Senate leadership, you're really hoping that Bill Cassidy and Lisa
29:45
Speaker 2: Murkowski do ultimately decide to vote yet ces for this nominee.
29:50
Speaker 2: That issue obviously is a pressing one, mister Chairman. But
29:54
Speaker 2: I wonder in terms of what realistically, if they get
30:00
Speaker 2: into September, the Senate is still going to be able
30:02
Speaker 2: to take up with the midterms that close. If the
30:05
Speaker 2: Clarity Act, in your mind, ultimately will die if it
30:09
Speaker 2: is an action this.
30:10
Speaker 11: Week, well, I think what they want to have is
30:13
Speaker 11: the vote to get on the bill, the first vote
30:17
Speaker 11: to bring up the bill, and it's the first test
30:19
Speaker 11: of where the Senate majority lies or lack of majority.
30:23
Speaker 11: You need sixty votes to pass major pieces of policy,
30:25
Speaker 11: so this would be a test vote to suss out
30:28
Speaker 11: where members where Senators stand before leaving for the August recess.
30:34
Speaker 11: I think that is a helpful thing for closing out
30:37
Speaker 11: the big gaps of policy that these senators may think
30:40
Speaker 11: need to be addressed. But without the votes necessary, you
30:43
Speaker 11: can't see how serious negotiators are and how serious you
30:47
Speaker 11: have to take their threats. So I think that'll be
30:50
Speaker 11: helpful to close this thing out. It may be September,
30:53
Speaker 11: but it may be the end of the year post
30:55
Speaker 11: election before the Clarity Act is finally resolved. Time will tell.
30:59
Speaker 11: But this vote is the beginning of that ending point
31:02
Speaker 11: of Senate action.
31:04
Speaker 5: So you're not giving up. It sounds like on these
31:07
Speaker 5: if everybody goes home, I mean, could this be a
31:09
Speaker 5: productive lame duck session? I'm not fooling. Maybe this gives
31:14
Speaker 5: lawmakers the clear to vote on things they wouldn't now.
31:18
Speaker 11: Look, I served for twenty years in the Congress, and
31:20
Speaker 11: my first couple of years I thought lame ducks were
31:22
Speaker 11: going to be super exciting, super interesting, and then I
31:25
Speaker 11: became very cynical of lame ducks. They're called lame ducks
31:31
Speaker 11: for a reason. It is a courteous way of saying
31:35
Speaker 11: a nearly dead duck a dying duck. So this was
31:42
Speaker 11: much friendly er terminology than what we would say now
31:46
Speaker 11: on X in our debates now, so I typically think
31:52
Speaker 11: lame ducks are really lame. There's all of this great
31:55
Speaker 11: hype and hope. They're going to deal with tax policy
31:58
Speaker 11: they haven't dealt with over the previous two years or
32:00
Speaker 11: four years or ten years, government funding. They're going to
32:03
Speaker 11: do it in a methodical way. It's going to be
32:05
Speaker 11: very thoughtful this time, not chaotic like in the past.
32:08
Speaker 11: The only thing you can really depend upon with congress
32:12
Speaker 11: congressional action before the end of the year is the
32:14
Speaker 11: National Defense Authorization Act, and that too, you have this
32:18
Speaker 11: grand hope that it could be this major package where
32:20
Speaker 11: you could encompass all this additional policy, but at the
32:24
Speaker 11: end of the day it usually becomes pretty narrow. So
32:28
Speaker 11: I think great hopes for lame duck are usually misguided.
32:33
Speaker 11: But I do think because things are so close on
32:36
Speaker 11: clarity that you do have a short list of issues remaining.
32:39
Speaker 11: Those that are actively engaged in this on the Democratic
32:42
Speaker 11: side have a list of no more than three or
32:45
Speaker 11: four issues that can be resolved, ethics being the most
32:50
Speaker 11: politically sensitive, the most politically potent one, and Senator Tillis
32:54
Speaker 11: and Senator Diego have worked really dutifully here to figure
32:59
Speaker 11: out a landing space for enough senators to get to yes.
33:03
Speaker 11: And so we'll see if that can come together this
33:06
Speaker 11: week or what it tees up for the fall. But
33:08
Speaker 11: I am optimistic that it eventually gets resolved before the
33:12
Speaker 11: end of this Congress.
33:14
Speaker 2: Well, ethics in focus when it comes to clarity. Ethics
33:17
Speaker 2: also in focus in your form chamber, mister Chairman, is
33:21
Speaker 2: the Ethics Committee obviously not only published its investigation into
33:26
Speaker 2: your former colleague from North Carolina, Chuck Edwards, in which
33:28
Speaker 2: it suggested that he engaged in unethical behavior and the
33:32
Speaker 2: way he treated some female staffers, hence why he is
33:34
Speaker 2: no longer running for reelection. They recommended his censure. They
33:37
Speaker 2: also have opened an investigation into Congressman Max Miller of
33:40
Speaker 2: Ohio as he faces allegations which he denies, of domestic
33:44
Speaker 2: and child abuse. He maintains that he is going to
33:47
Speaker 2: stay not only in Congress, but continue his bid for
33:52
Speaker 2: another term. And I wonder, from the outside looking in,
33:54
Speaker 2: what you make of not only his situation but the
33:57
Speaker 2: way in which leadership has handled it.
34:00
Speaker 11: Well. The first thing is you have to have a
34:03
Speaker 11: really for leadership of both parties. You have to have
34:07
Speaker 11: real lines in the sand, and you have to be
34:08
Speaker 11: able to call that out clearly, and unfortunately, with narrow
34:11
Speaker 11: majorities in the House, there are political ramifications for having
34:14
Speaker 11: a high standard of ethics and ethics in the House
34:19
Speaker 11: representatives and what it does to your political party's brand.
34:22
Speaker 11: In the case of my colleague and neighboring district Chuck
34:27
Speaker 11: Edwards in North Carolina, the Ethics Committee worked the process work.
34:32
Speaker 11: They took the accusation seriously, They investigated, they recommended censure,
34:36
Speaker 11: which required a by parson vote of the Ethics Committee
34:40
Speaker 11: in an election year. That process worked very clearly, and
34:44
Speaker 11: Congressman Edwards did the right thing and quit the race.
34:50
Speaker 11: He should resign based off the serious allegations. The censure
34:56
Speaker 11: motion should be significant enough for him to return home
35:00
Speaker 11: to North Carolina and do the repair work in his
35:02
Speaker 11: personal life. When it comes to Congressman Miller, you have
35:08
Speaker 11: a nasty divorce between the daughter of the Republican senator
35:13
Speaker 11: and a Republican member of Congress from both both states.
35:17
Speaker 11: They're they're fighting this out in the press. It is
35:20
Speaker 11: a very sad, horrible story of a family dispute and
35:26
Speaker 11: major allegations of of domestic violence abuse in everything else
35:32
Speaker 11: that's been now argued out on X and in the
35:36
Speaker 11: in the public sphere. This is an unfortunate thing for
35:39
Speaker 11: the families involved, the people involved here and that too.
35:43
Speaker 11: The Ethics Committee needs to do its will and investigate
35:47
Speaker 11: these and see what the facts are in this domestic
35:51
Speaker 11: in this he said, she said, the father in law said,
35:55
Speaker 11: the senator of the congressman fight. It's a it's a
35:57
Speaker 11: very it's a horrible thing played down out rent large.
36:01
Speaker 11: It's a really sad situation to follow.
36:05
Speaker 5: Yeah, this is an ugly one, it is, mister Chairman.
36:09
Speaker 5: Could both of these seats flip as a result.
36:12
Speaker 11: Yes, both are highly competitive Republican seats. In the case
36:16
Speaker 11: of North Caroline's eleventh Congressional District, they will replace Congressman
36:20
Speaker 11: Edwards the committee process. There's clear law and a legal
36:24
Speaker 11: process in North Carolina for the replacement of somebody this
36:27
Speaker 11: late in the game an election year, the Republican Party,
36:31
Speaker 11: the lot of the district will meet and replace a
36:34
Speaker 11: Congressman Edwards on the ballot. I think that takes this
36:37
Speaker 11: seat back into a Republican column. We'll see what happens
36:40
Speaker 11: in Ohio. I don't have the same granular details there,
36:42
Speaker 11: but these are both highly competitive districts in a highly
36:46
Speaker 11: competitive year that benefits the Democratic Party. So tough thing
36:50
Speaker 11: for Republicans to watch, but a huge opportunity for the
36:54
Speaker 11: Democratic Party to pick up these seats, all right.
36:59
Speaker 2: Former Congressman from North Carolina, former Chair of the House
37:01
Speaker 2: Financial Services Committee, Patrick mckenry, now of Bloomberg Politics contributor,
37:05
Speaker 2: thank you.
37:05
Speaker 5: So much, thanks for listening to the Balance of Power podcast.
37:12
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