Jeffries on Ending the Shutdown, NYC Mayor's Race | Balance of Power
Summary
Government Shutdown: The podcast discusses the ongoing government shutdown, highlighting the impact on federal employees, particularly air traffic controllers, and the political dynamics between Republicans and Democrats.
Healthcare Crisis: A significant theme is the healthcare crisis, with Democrats emphasizing the need to extend Affordable Care Act tax credits and address healthcare affordability as a critical issue.
Political Strategy: The conversation touches on the political strategies of both parties, with Democrats pushing for a bipartisan agreement to reopen the government and address healthcare, while Republicans face internal pressures.
Market Impact: The podcast notes the financial market reactions to geopolitical events, such as the sanctions on Russian oil companies, which have led to fluctuations in oil prices.
International Relations: The discussion includes President Trump's upcoming trip to Asia and the implications of US sanctions on Russia, highlighting the broader geopolitical landscape and its impact on markets.
New York City Mayoral Race: The podcast briefly covers the NYC mayoral race, focusing on the Democratic nominee's stance on affordability and the political implications of endorsements.
Energy Market Insights: Insights are provided on the energy market, with predictions of declining crude oil prices despite recent geopolitical tensions affecting supply and demand dynamics.
Sanctions and Diplomacy: The effectiveness of sanctions on Russia is debated, with experts suggesting they contribute to a broader strategy of economic pressure without immediate decisive outcomes.
Transcript
[Music] Bloomberg Audio Studios, podcasts, radio, news. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5:00 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. I'm Tyler Kendall here alongside Joe Matthew in Washington where the government shutdown continues. We are now in day 23 and we're seeing Republicans starting to try to ramp up their own pressure on Democratic colleagues. We saw the transportation secretary Shawn Duffy on Capitol Hill today and we've given you a lot of different dates to put in your calendar. But Joe, here's another one. Tuesday, Shawn Duffy confirmed, is the first full paycheck that could be missed by air traffic controllers amid really what's been a shortage already from them since this shutdown has started. >> To think we're clearing another pay cycle here is pretty remarkable. It was two weeks ago we were talking about how that might be an inflection point. But uh it's true in air traffic controllers long before the shutdown uh ever hit and we were reminded of this with that terrible tragic uh crash here in Washington DC in many cases working 60hour weeks uh exhausted away from their families and to remove their paychecks right now is a very difficult circumstance knowing we simply cannot train more air traffic controllers fast enough to fill these towers. So, yes, the airline uh component here is a big one. We talked about the expiration of SNAP benefits the 1st of November, the open enrollment, all of these items are creating a pretty major point of pressure here on Capitol Hill that brought us to our conversation with Hakee Jeff. >> Right. Exactly. And just to put a finer point on that November first date for SNAP benefits, we really are seeing this become an issue on both sides of the aisle. But I can say that I spoke to one senior aid to Democratic leader Chuck Schumer today who told me that it really is the moderates within the Democratic conference that appear to be really making this a a pressure point and that is something that we should watch as we inch closer to that date. >> That's for sure. Uh the affforementioned David Gura is still in Washington and graces our desk right now here on Balance of Power. of course, Bloomberg correspondent, host of the Big Take podcast, which is why you sat down uh for a good chunk of time with Hakee Jeff in his office. The sense of frustration was, I'm guessing, palpable. >> It It was. And as you both know, this is such a unique shutdown, the circumstances of it, how it's unfolding, and you've done such a good job of laying out all the potential pressure points here in the days to come. So far, over the course of these 23 days, a lot of people have been shielded from those effects, the effects of the shutdown. Uh we've seen Russell Vote, the head of OM, moving a lot of things around uh to make it so that some people are paid, others aren't. Some programs are kept running, others aren't. That can only last so long, one would think. Um and as we look ahead to Friday of this week to Tuesday of next week to when open enrollment begins for health insurance, um pressure is going to mount. So it was a good time to sit down with the minority leader just to get a sense of sort of how this is all unfolding from his vantage in a very quiet capital building today. I asked him just sort of what kind of conversations are happening among Democrats and Republicans and here's what he had to say. >> As Democrats, we continue to make clear to our Republican colleagues that we will sit down with them anytime, any place in order to reopen the government to negotiate a bipartisan agreement that actually makes life better for the American people in terms of spending and funding. But we also have to decisively address the Republican healthcare crisis. We've maintained that position from the very beginning before Republicans shut the government down and during the entirety of the shutdown because it is a real crisis that has been created at this moment, particularly as it relates to the urgent need to extend the Affordable Care Act tax credits. >> As you and I are speaking, the House Speaker is doing a press conference just down the hall. What is the level of engagement? Do you pass one another? Are you speaking with one another? Are Democrats talking to Republicans right now? Uh the conversations have been very limited unfortunately because Donald Trump has not given House Republican leaders or Senate Republican leaders permission to negotiate reinforcing the principle from our view that he made the decision to shut the government down. Uh they want to continue to inflict pain on federal employees. They've done that from the very beginning of Donald Trump's presidency. In fact, uh, more than 200,000 federal employees had been forced off the job prior to the government shutdown. And this is something that we've continued to see them build upon during the shutdown. Until Donald Trump gets serious about reopening the government, unfortunately, we're going to remain in this situation and everyday Americans are being hurt. >> He's getting ready to take a trip to Asia. Is it appropriate for him to be doing that at this moment when the government is is shut down? >> I I think that the president has a responsibility both domestically and throughout the world. However, what has been irresponsible is that throughout this shutdown, he's found more time to golf uh than he has to engage with Democrats on Capitol Hill. He's decided to try to steal $230 million in taxpayer funds from the Department of Injustice. Donald Trump and his administration have found $40 billion to bail out a right-wing wannabe dictator in Argentina and can't find a dime to extend the Affordable Care Act tax credits to keep health care affordable for tens of millions of Americans. And on top of all of that, uh, they are demolishing the east wing of the White House in ways that have appropriately horrified the American people. >> I want to ask you about potential off-ramps and Tammy Baldwin, the senator from Wisconsin Democrat, said Trump is the off-ramp at this point. Do do you agree with that assessment? And has there been any kind of outreach or dialogue between you and the White House? Uh, Lader Schumer made clear earlier this week that we have reached out to the White House again uh to indicate that prior to Trump's departure uh for Asia, he should sit down with Democrats to find a path forward to reopen the government to enter into a bipartisan spending agreement and to address the healthcare crisis that Marjgerie Taylor Green acknowledges must be addressed and that traditional conservatives who are in the toughest seats in the country have now publicly acknowledged this week needs to be addressed. >> Can I ask you a question of congressional mechanics, and that is, can the Democratic leader pick up the phone, call the White House, and reasonably expect the president's going to take that phone call? Are you able to do that? And if so, what's keeping you from having that dial? >> Well, traditionally, that probably is the case, but in this White House, uh, that's very much unclear. Donald Trump didn't have a meeting, uh, with House or Senate Democratic leadership until 2 days prior to the government shutting down. >> It was opening night at the Garden last night. Knicks versus Cavs, Knicks 1119 to 111, also the final mayoral debate in New York City. Did you watch it? Have you kept up with what happened on stage last night? >> Uh, I wasn't able to catch the debate live. I did catch the final few moments of the Knicks game, I do admit. Uh, but the debate had already ended at that point by time uh my day ended. I did think it was interesting yesterday and a strong step uh that was taken by Zoron, the Democratic nominee, when he indicated his intention to retain our current police commissioner, Jessica Tish. I think that probably will provide a lot of comfort to people uh throughout the city of New York. She's done a great job. She's well respected. We're a diverse city. Uh and it'll be interesting to see how that is received upon my return home. >> Uh you've been asked about this a thousand times. Let me ask a thousand1 times. Um, are you prepared to endorse the Democratic nominee for mayor of New York City? >> Well, I'm I'm what I'll say is I'm prepared to weigh in in advance of early voting and early voting days away. >> Early voting starts on Saturday. >> Yeah. Um, what's what's holding you up? I mean, what are the issues that you're still concerned about? I know that you said the last time you were asked about this. You're going to have a conversation with Sor Mandani, another conversation. >> What's left >> undisussed? Well, I hope to speak to him today and tomorrow. And I, in fact, I plan on speaking to him today uh and tomorrow. And I think my from my standpoint, look, um I was prepared to try to bring this to a close one way or the other several weeks ago and then the government shutdown hit. And honestly, David, it's been all encompassing because this is a traumatic moment for the country that this has been inflicted on the American people. And then layer on top of it, right, just shutting the government down as Republicans have done is very problematic. uh but trying to communicate with the American people why we as Democrats also believe that addressing the Republican healthcare crisis is necessary and explaining the entirety of the assault on their health care that has occurred this year. beginning with the one big ugly bill and the largest cut to Medicaid in American history and the fact that their hospitals and nursing homes and community-based health centers are closing all across the country, home care will be adversely affected, the possible cut to Medicare at the end of the year, the Republican refusal to extend the Affordable Care Act tax credits, and the threats that they're now making to even try to repeal the Affordable Care Act and the assault on public health infrastructure. This is extraordinary stuff. We've never seen anything like this uh in the history of the country, which is why we believe it needs to be decisively addressed along with, of course, reopening the government, standing by our hardworking federal civil servants uh and making sure that we can enact a bipartisan spending agreement. So, it's been all-encompassing, you know, for the last uh several weeks. That said, uh I do have a sense of obligation to weigh in one way or the other in terms of the mayor's race in advance of early voting. So, I did watch the debate and the themes of criticism that came up from the other two candidates were he's inexperienced and his comments on the Middle East are problematic. Are those likewise the same issues that you want to talk to him more about? What what's left unsaid between the two of you? >> Well, I've certainly already publicly uh communicated and privately communicated some of my concerns with respect to some of the views that he's expressed uh in terms of foreign policy. That said, um I believe his relentless focus on affordability is the right focus. The question, you know, becomes for any mayor, for any executive, how are you going to implement uh that objective? Because it's the right objective. Uh but he's got to navigate a treacherous governmental terrain in terms of the city, state, and most significantly the federal government. uh because it's clear that Donald Trump has it out uh for Democratic le cities all across the country and we've got to be prepared for the fact that Donald Trump is coming for New York. >> I guess my question is one of confusion. So I sat down with Governor Cuomo and in that conversation he said uh I'm a Democrat. My dad was a Democrat. He's really taking up that mantle. Of course he lost the primary. He's running as an an independent. Isn't there an element here of of confusion that in this vacuum >> and you could I guess do something to close that vacuum. he's he's able to take up that mantle to the detriment of the dulyeleed Democratic nominee. >> Well, it's interesting cuz he is running as an independent, so he's not the Democratic nominee, but of course, he has a long history uh as a Democrat. I think some of the concerns uh that I've seen articulated however is well what is the actual path to victory given the inability to convince a majority of Democrats in the primary uh that you were the right person uh to lead the city moving forward at this moment. >> Um a fascinating conversation wide ranging. We did talk a lot about um the Democratic party and what it can learn from the race in New York as well. also picking up on what he's just saying there a moment ago. I mean Zaran Mandati had a um substantial win in that Democratic primary. What does he take away from that as he looks at >> the political terrain across this country which of course is a huge part of the minority leader's job to assess who's running for what? >> What primaries are um ones that can be contended. Um we talked about kind of younger voters that say that they might have how they've been animated by some of these issues. And we came back to that notion of affordability which again he got the the the mayoral candidate New York got a lot of praise from Hakeim Jeff about focusing on affordability in a very very very singular way. >> Well, affordability also perhaps lends to this conversation about the shutdown. I was pretty struck with the Democratic leader telling you that this is a traumatic moment for our country in his words. We're of course tracking this vote on Capitol Hill tonight. Potentially could pay federal some federal workers but doesn't look poised to pass. Did you get any sense from uh leader Jeff that the pay aspect, the federal workers, they're potentially going to miss this full paycheck tomorrow that that is really leaning and weighing on the Democratic party? >> I think it is certainly weighing on him and he said as much, but you heard from him in that conversation uh his adamance that this not be doled out selectively that you can't prioritize some federal workers over other ones in the way in which Republicans in the White House have have proposed here. So again, getting back to those pressure points, I think there's a awareness here among Democrats and Republicans as well that this is going to be a moment when, for lack of a better phrase, a lot of Americans wake up to the fact that this is happening. It's going to really hit them hard. And by virtue of how this has all played out, that last paycheck wasn't one that was as as seismic as this one is likely to be. Um, so yes, I think he he recognizes it's going to weigh on a lot of people. Is it enough to kind of push him to make any concessions? No, it didn't seem like he he felt that way. >> Do we really believe he didn't watch the debate last night? I mean, I believe he caught the end of the game. Yes, >> he didn't watch that. Wasn't on in the office. >> I mean, uh, two days away from I can only believe what he's saying there. But I will say in New York where I live, >> these were two duel. I mean, you had both candidates, both Cuomo, uh, and Mandani going to the stage. First thing they said was, "Sorry that you're not able to watch the Knicks game tonight, but thank you very much for watching this debate." So, there's a recognition of the fact that there was some split screen programming there in New York last night. >> Absolutely. So, if you'd done the interview tomorrow, we'd have the endorsement, I guess. >> Gosh, I didn't feel like I got 99% of the way there based on what he was saying about his obligations. >> So, what do you think of that? And did he wait so long that it doesn't matter in New York? >> That's a really great question. One I've really wrestled with over the last few weeks. I spoke with Governor Cuomo a few weeks back. How much does an endorsement like this matter? Of course, we haven't heard from Senator Schumer either. And in the past, both of them have have weighed in on mayoral races. >> If you look at how well Mandani performed in that Democratic primary, >> he did so without these endorsements. That's fine. So, I think you rais a really great point, which is how much does this really matter to the base of support that's really elevated Storm Mandani? I don't think that it matters that much. But again, you heard there from Hakee Jeff. He feels an obligation to do so because of his his position he's in and that he's in the eth district of of New York. He feels like he has to do it. So, we'll see if it in fact he does it here in the next, as I said, two days. >> Yeah. >> Well, I was going to ask where where this is headed. How likely is it that we are going to see something from the leader? >> Look, I'm I'm guessing here based on the conversation, the tone that he took, I think he's likely to do it. I think he feels that obligation is a real one. But again, time is ticking. So, >> there's a lot more of that interview by the way. The Big Tape podcast about to drop just dropped. >> Just dropped 20 minutes in length, so you hear the whole thing. Apple, Spotify, you know the drill. I go through this every day. Isn't the Big Take podcast with our good friend David Gurus. It's great to have you back in DC, David, and thank you for the great reporting. I'm Joe Matthew alongside Tyler Kendall. This is Bloomberg. Stay with us on Balance of Power. We'll have much more coming up after this. >> You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5:00 p. p.m. Eastern >> on Apple CarPlay and Android Auto with the Bloomberg Business App. >> Listen on demand wherever you get your podcasts or watch us live on YouTube. The Thursday edition of Balance Power on Bloomberg television and radio. We have some breaking news happening just moments ago. Senate Democrats blocking a Republicanbacked measure aimed at paying military troops and some federal workers during the US government shutdown. It is the latest sign that we are no closer to any agreement to reopen the government. Joe, a pretty partisan vote here. It looks like it failed to advance 54 to 45. Of course, as you all know, 60 votes are needed in order to get such a measure through. >> Yeah, this is uh something that we knew was going to happen. We in fact talked to the author of that legislation last evening, Senator Ron Johnson, who was struggling with this idea of not necessarily having the votes for it to pass knowing that Democrats were filibustering against this measure. And a lot of campaign ads are probably going to be made from those speeches. Right. >> Right. Exactly. But Democrats, of course, have put up their own measures and they're arguing when it comes to this bill in particular, it's going to give the administration too much power to determine who gets paid and who doesn't. Then ultimately that's how this bill really did fail today in the US Senate. >> Yeah, it's the your take is spot on. Democrats have two bills of their own today that they're going to be offering. Chris Van Holland, Democrat from Maryland, has one. Gary Peters of Michigan. The other uh those are going to fail as well. So this swirl continues and the affforementioned Ron Johnson, the Republican from Wisconsin, tried to make the case for his bill last evening here on Bloomberg. Listen, >> clearly the current system is utterly broken right now. We we just crossed $ 38 trillion in debt. And the definition of insanity is doing the same thing over and over again expecting different results. So again, we're in this dysfunction. Let's not make federal workers who are being forced to pay pay for our dysfunction. Not a difficult case to make. This is legislation that would pay employees who have been forced to stay on the job, not furoughed, but still as essential workers continue working. Democrats are concerned, as Tyler mentioned, that's gives the administration too much authority and in fact makes it a case of some get paid and some don't and we shouldn't be making decisions like that now with 750,000 federal workers furoughed. See how our panel feels about it. Bloomberg Politics contributors Adam Hajj and Rick Davis are with us. Adam, our Democratic strategist, managing partner at Bully Pulpit International. Rick, Republican strategist and partner at Stone Court Capital. Uh, what do you think about this, Rick? We knew it was going to fail and this is going to be fodder for Republicans in the midterms. >> Yeah. This is just a sort of continuation of the exercise that um you know leaders uh Thun has been doing every day pushed putting up the clean CR for a vote it fails do it again tomorrow it fails. Uh I think there have been 11 or 12 votes now on that. Um uh uh and and so this is sort of a another way of saying the same thing, which is, you know, we want to try to create uh some progress on government reopening, but unless we've got a deal across the board on all these various issues that the Democrats have raised, um nothing is going to pass. And you know, I actually think it may have a pretty salutoy effect on the employees because these are the folks who are sitting around going, "Now wait a minute, we're the victims. uh you guys are dysfunctional on Capitol Hill and maybe we just start not showing up for work. And you know, I I think if I were in a union in the uh federal government, which is almost laughable that I would be in a union in the federal government, um you would have to argue that these union managers should start telling their employees, hey, you know, maybe you shouldn't show up tomorrow. Maybe we ought to do a walk out. Maybe I mean, like I don't hear any of that happening. And yet that's a classic union strategy. >> Well, Adam, what's your take and what was the riskreward calculus here for Democrats? Because as Joe mentioned, this seems like perfect fodder for Republicans as they start to make their midterm election campaign ads. >> I think the thing to keep in mind is that you shouldn't pick and choose who does or doesn't get paid. That's a basic principle. Just Joe mentioned, Democrats have put forward a proposal uh to pay all federal employees as the law makes clear. I think the fact that the White House has said that they may or may not fire some folks and keep some folks from quote unquote Democrat run agencies as if they're not the leaders of the entire US federal government. I think gives Democrats a little bit of pause here. I think the big the biggest takeaway is that through all all of this debate throughout the entire shutdown, it really has become a topic about healthcare and what will happen on November 1st when people start seeing some of those real uh price increases and get that sticker shock. And Democrats have said, "Look, let's negotiate on this bill. Come to Washington. Let's do it." The problem for the president, I think the more he does go and play golf or does take the trip to Asia, it raises questions about whether he's serious about getting a deal and he is the only one who can get a deal done uh to stop a government shutdown. >> What do you think about the timing of this trip, Rick? Because it looks like the government will be shut down for at least another week and we're going to be knocking on the door of November 1st here by the time uh the president gets back to the United States. That's when SNAP benefits are going to start expiring and so forth. This gives Democrats, as we heard from Hakeim Jeff a little while ago, a pretty good talking point as well. Should the president cancel? >> No. Um um I I kind of feel for uh the president. This is actually the one time he hasn't exactly told uh Thoon and Johnson what to do. And that and then he gets criticized for usurping Congress. Right. Here's Congress's chance to go and do their job. Uh the president has a job to do. He should go to Asia. He should meet withQi. He should figure out a way past these trade barriers that that we have installed and and and make sure that Asia doesn't erupt into either a trade war or a shooting war. I mean, like I'd say that's important and that's the president's job and he didn't pick the timing of this, but but I just can't fathom why uh there isn't more leadership uh by the Republican leadership in the House and Senate. It's their House and Senate and they have been criticized heavily for being usurped by the White House and here's an opportunity that they can do something on their own to get government back working and yet they seem unable to finding a strategy that will work 22 days in. And I mean I don't know about you Joe but like that's a long time to be thinking oh we'll just keep doing the same thing and that'll work over time. that that is the definition of insanity. >> So, Adam, is it actually more to perhaps Democrats benefit if President Trump does get more involved with these conversations, whether that is before or likely after he comes back from this trip to Asia? >> I mean, on this I just listen to some of the president's own words. I mean, he has clearly articulated in some of his more candid moments that he knows his healthcare issue is a real anchor around the political standing of the Republican party. It's shocking maybe to some, but like the fact that Marjorie Taylor Green even as Hakeem Jeff alluded to is essentially saying the same thing that House Democrats have been saying that this is a real issue. We got to solve this issue. It hurts workingass families who are going to pay higher premiums for healthcare. That is I think the president understands the politics of it. I think John Thoon and and uh to more a greater extent speaker Johnson has politics in his caucus in their conference that makes it harder to do a deal on the ACA. But at the end of the day, as Rick was alluded to, the math of the vote of the Senate is 60 votes. The way out of this is doing a deal that gets 60 votes to reopen the government and to tackle the healthcare crisis that some of the Republicans created. And so that is I think that is the key. And the sooner we get there, the sooner this will all be over. >> We have an update on the ballroom project that we need to ask you both about. Of course, happening at the White House right now. As the president leaves, I guess they'll be able to do some serious work over there because it is a massive construction site. And according to some, it looks like somebody dropped a bomb on the east wing. There's an update here. Just even in the last 24 hours, President Trump has now decided to demolish the entire east wing of the White House. to make room for the ballroom, remembering that he had said back in July when this was first announced, the construction of the ballroom, uh that it would not interfere, this is a quote, would not interfere with the current building. The project's plans paid total respect, he said, to the existing structures architectural style. Two things have happened since then. One, the price tag has gone up $100 million to $300 million. And as the president explained yesterday in the Oval Office, they had no choice but to tear down the entire east wing. Listen, >> we determined that uh after really a tremendous amount of study with some of the best architects in the world, we determined that really knocking it down, trying to use a little section, you know, the east wing was not much. It was not much left from the original. It was uh over the course of a hundred years, it was changed. Well, it's gone or will be soon. I actually took a walk by there last evening, Rick, uh, and and realized you actually cannot walk through the complex on Pennsylvania Avenue. There's a massive wall there. They've walled off Lafayette Park and there's a wall running along the Treasury Department, so you cannot see uh, this demolition taking place or take pictures of it. You've worked in the White House for a couple of administrations. What did you think when you saw the entire East Wing is coming down? you know, I'm I'm kind of torn. Um um you know, it it is a historic location, right? And and it is a rare thing uh to have in the middle of the nation's capital, both the office and the residence of a president in one place. I mean, it's a wonderful Yep. >> kind of construct for the American people. That being said, there's been a lot of changes to the White House, the West Wing, the East Wing over many, many uh years. And and so change in its own right has already been happening quite a bit. And and and it's not the same place that it was initially. And the Brits burned it down in the 1812 war. So like there's been a lot of changes in that place over time. Uh and yet at the same time uh and I do think they could use more function rooms like this. I mean you you almost have to now do things inside the White House compound for security reasons. I mean we used to go over and do events for the White House in like the Daughters of the American Revolution Hall because it was just down the street and we could walk there. Can't really do that anymore. >> So uh I'm kind of I'm kind of torn because I do think the facility needs upgrading. Uh, and you do need a bigger ballroom capability. Um, the East Room just doesn't hack it for the kinds of things that are considered normal today for heads of state. Uh, and uh, and yet at the same time, I'm I'm feeling kind of sad about it. >> All right, our political panel today, both Bloomberg Politics contributors, Rick Davis and Adam Hodgej. Thank you both so much. And a redhead crossing the terminal right now. President Trump confirms he will meet with Chinese President Xi Jinping. That's next Thursday. That's according to the White House press briefing that's currently underway. We'll get into that and a lot more when it comes to foreign policy, including moves against Russia. That's up ahead. Stick with us. This is Bloomberg. >> Stay with us on Balance of Power. We'll have much more coming up after this. >> You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5:00 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say, "Alexa, play Bloomberg 11:30." >> Thanks for being with us here on the Thursday edition of Balance of Power on Bloomberg TV and radio with breaking news from the White House. This just came from the press secretary who's at the podium right now in the briefing room with some opening remarks making clear that the meeting will take place. President Trump and Chinese President Xi will sit down together on October 30th. That's a week from today. Knowing the president is about to be wheels up this weekend uh toward the apex summit in South Korea. Tyler, you're going to be along for the ride on this trip. This is about as high stakes as it gets. >> As high stakes, highly anticipated, Joe, it's going to happen on the sidelines likely of the Apex summit that's happening in South Korea. There is a lot at stake in this meeting, but I have to say our analysts at Bloomberg Economics say that their base case right now is that we're likely looking at a 90-day extension to that tariff truce that's in place that's set to expire on November 10th if everything goes as planned. But of course, a lot on the table. Everything from export curbs to soybeans to also China's imports of Russian energy supplies. Which brings us to this latest move from the White House moving to sanction two of the largest Russian oil companies. And uh we we heard this come out of the White House yesterday after President Trump had met with the NATO Secretary General Mark Ruta. Uh he explained earlier uh sort of where these negotiations where with Russia currently stand. Take a listen to part of what he had to say. >> We canled the meeting with President Putin. It just it didn't feel right to me. It didn't feel like we were going to get to the place we have to get, so I canled it, but we'll do it in the future. >> Mr. President, can you tell us a little bit about why you're elevating sanctions against Russia right now? What's currently? >> I just felt it was time. We've waited a long time. I thought that we'd go long before the Middle East. And Mark, as you know, we did the Middle East plus seven. So, we did seven different wars. >> That was the president yesterday at the White House. The price of oil soaring today after the US announced these sanctions against two of the largest Russian oil companies. It's really considered a change of course for President Trump. This marks the first direct US measures on Russia of this term. WTI currently hovering around $62 a barrel. And Bloomberg estimates that the Russian companies that were blacklisted, one is state controlled, the other is privately held together. They account for nearly 50% of Russia's crude oil exports. For all of the latest and to look into whether or not this is going to make a difference when it comes to the Kremlin's calculus, we're joined now by Mike Mclo, Bloomberg intelligence senior commodity strategist. Mike, thanks so much for joining us. Can you answer that question? Can you put this into context? Just how difficult will it be for Russian barrels to reach the market after this move from the Treasury Department? Well, that's the thing about Russian barrels, any type of sanctions, they always find their way to the market. It's just a question how they do it, where they do it. And you also mentioned the largest one of the largest buyer of Russian oil is China. Yet, China's total demand is declining. So, Russia's becoming increasingly dependent on its unlimited friendship with President Z to to to take that oil. But the bottom line for crude oil is we've had a big bounce in crude oil in a bare market from lows. The member was trading $57 the other the other day. The low for the year is 55 and last year's low is 65. So it's still a very much a bare market. It's bouncing. At the same time, this week we had a pretty significant correction in gold. Now that's a bull market that's backed up. But I look at crude oil is it's a bare market. Someone has to shift. And the bottom line I'll end with is crude oil's going up. I'm sorry. Crude oil is going down despite this record setting stock market. Just imagine if we got a little pullback in the stock market. Crude oil is ready, I think, for the next input is to push it towards those lower lows and it needs something unusual like this to keep at least somewhat bid in the near term. >> Huh. >> So, you're not moving off your forecast though, right? Mike McLan, you've been very consistent and you have been correct. Are we going back below $50? >> Oh, yes. I I'm sticking with that one, Joe. I don't know what's going to change it. And just the fact that crude oil is down about 15% this year and the stock market's up about 15%. That's divergent deflationary weakness. But it's not alone. Corn, soybeans, wheat, the grains are all doing the same thing. Natural gas has a problem and it's priced for a colder than normal winter. Yet, we might get normal global, you know, warming trends. And crude oil is just over supplied. And also, let's remember what's changed in the history of crude oil's last 20 years when it bottom around $40 a barrel since 2008 is US was a net large importer then. Now, US is one of the largest exporter on the planet, a major producer. And the rest of the world, for instance, China is not demanding as much anymore. is just stuck in a normal bare market. I don't know what shifts it, but I'm conf I'm fearful what can really make it accelerate and that's just a little backup in beta. >> Got it. He's the best at this. Mike Mclo with us live from Miami. Bloomberg Intelligence senior commodity analyst. Mike, thank you so much. Right now, WTI, West Texas Intermediate, as Tyler mentioned, right below $62 a barrel, up almost 6%. Brent crude also rising almost 6% to $66 a barrel. So, we're seeing an instant reaction here in the financial markets. the question, what will be the diplomatic reaction to this? And for help, we turn to an expert, James Jeffrey. The former ambassador uh is with us right now on Bloomberg TV and radio. Former ambassador uh and longtime diplomat here in Washington. It's great to have you back, sir. Does this decision by the Trump administration to sanction Russian oil bring us closer to an end to this war? because so far sanctions have not done a lot to alter Vladimir Putin's behavior. >> No, that's true. But first of all, thanks for having me on. Um, >> yes, sir. >> This war is being fought in every sense as a nutritional campaign. Think of World War I, at least in the West, almost four years with very little change on the ground. So therefore, little things are not going to make a difference decisively. Rather, they add up. So you take what we just heard, this is pretty significant. This is a major hit. In the end, the Russians will get their oil out, will be able to absorb that because as you're have been reporting, uh oil prices per barrel have been quite low around $60. They're up a bit now. But uh this is going to hurt the Russians. In addition, the Trump administration has been apparently uh greenlighting intelligence for u long range European missiles that the Ukrainians have to hit targets deep inside Russia. You have the campaign against refineries by the Ukrainians using their own drones. And you have the Europeans moving forward on a slower timetable to cut off all Russian gas uh that they're still importing. Bit by bit, this is a making things harder for the Russians. Their economy is at a point where it's not growing and they can't produce uh more military capability, although they can sustain what they have. And two, it sends a signal politically to Putin that our will has not collectively been broken. That's important because he thinks he can wear down Zalinski, wear down the Europeans, and wear down Trump. >> Mr. Mr. Ambassador, much to Joe's point earlier about this idea that we have seen sanctions before, President Trump himself has pointed to that as a reason why he waited. Uh he's previously been asked why he wouldn't do this. He said he wasn't sure if it would deter Russia or not. But then he said that the time is right now. If we sort of just retrace our steps from these past few weeks, is there any moment that you can point to that you think might have been the tipping point here or have we been creeping along towards this end goal all along? >> Uh, we've been creeping along, but I would say the turning point was after the president's recent call with Putin where he thought and probably correctly that Putin gave him some signal, some hints that he could be flexible on a ceasefire and a termination of the war. There was then a follow-up call between Secretary Rubio and the awful long-term Russian foreign minister Lavro, Mr. No. Well, uh, apparently uh, Rubio reported back that the Russians were not moving. So, uh, Trump, who had of course invited Putin to Alaska, was ready to have another summit in Budapest, decided this guy is playing with him. So bang, he cancels the uh Budapest meeting and also he's taking these additional steps. Trump would like to see a negotiated settlement of this war because he doesn't see it leading to a Ukraine win and he needs to do business with Russia. He needs to do business with China, etc. But he's not going to cave on this and that's another uh today is another signal of that. >> Is he correct on his assumptions about the battlefield? Ambassador, I'm wondering where your thoughts are at this point as President Zilinski requests Tomahawk missiles to turn the tide in this war. We know that they're also using long range missiles even without the United States contribution being provided by Europe. These uh these desert shadow or dark shadow uh missiles, if I'm using the term correctly, could strike deep into Russia. Is that what Ukraine needs? Well, Ukraine has those from the French and from the British. And as I said, they use American components and intelligence, and we've just greenlighted long range strikes into key infrastructure inside Russia for them. So, that's another big step. The Tomahawks would help further both as a signal of American uh uh strength and willingness to push back on Putin and also marginally on the battlefield. But basically nothing much is going to change the situation on the front unless one or the other side collapses uh psychologically, politically or economically. And neither Ukraine nor Russia seem to be in that position now. So it's going to drag on unless we can get negotiations going. >> Well, you alluded to it there with how some of our allies are also providing, of course, military assistance and and weaponry to Ukraine. The sanctions package that we were talking about seems to be coming in concert with the European Union this morning approving its 19th package of measures, including that there's these plans to ban Russian LG imports into the block by early next year. Can you talk to us about how regional partners have been so important to this effort to the White House's stance when it comes to the future of the war in Ukraine, particularly as we had the NATO Secretary General Mark Reta there just yesterday? >> Right. And he is a guy who was able to turn Trump around and uh explain to Trump why Europe and Ukraine are important. He's playing a huge positive role. Uh but uh the Europeans have funded uh when you look at both weapons including buying them from us and economic assistance, not to speak of taking in refugees, a greater burden than the United States has, but that's reasonable. We have global responsibilities. They don't and they're closer. Uh they're also a lot more Europeans than Americans. So that's okay. But they are doing a good job. these latest sanctions uh some come into effect next year, some not until 2027. But the key thing is there has been uh broadly defined a dramatic decline in hydrocarbon exports from Russia into Europe since 2022, particularly when the Northstream uh gas pipeline was cut off. What we're seeing now is LNG shipments and some oil shipments. uh they need to be uh uh cut off. That will take place as I said over the next uh uh 12 to 24 months. It's a good signal. Uh in the short term, it won't have much impact though. The uh Trump oil sanctions that we were just announced will have a bigger effect, I think. >> Interesting. So, with our remaining moment, Mr. Ambassador, is there a need for secondary sanctions has been drafted on Capitol Hill or should the president be in charge of this from the White House? Uh the president always regardless of the president I'm speaking as a guy who worked for many of them biased uh should have the final say on life or death things including a conflict with another nuclear power. Uh but he needs to keep that in his back pocket. Uh he needs to escalate. He determines like Kennedy did in the Cuban crisis how quickly and to what degree he escalates. But these things are good tools. be it the tomahawks, be it these congressional sanctions, secondary ones, uh if we need to put pressure on and he will eventually, I think, if uh Putin doesn't uh change his position. >> All right, Mr. Ambassador James Jeffrey, former ambassador to Iraq and Turkey and special envoy to the global coalition to defeat ISIS. Thank you so much for joining us. >> Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already, Apple, Spotify, or wherever you get your podcasts. And you can find us live every weekday from Washington DC at noon time Eastern at bloomberg.com.
Jeffries on Ending the Shutdown, NYC Mayor's Race | Balance of Power
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[Music] Bloomberg Audio Studios, podcasts, radio, news. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5:00 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. I'm Tyler Kendall here alongside Joe Matthew in Washington where the government shutdown continues. We are now in day 23 and we're seeing Republicans starting to try to ramp up their own pressure on Democratic colleagues. We saw the transportation secretary Shawn Duffy on Capitol Hill today and we've given you a lot of different dates to put in your calendar. But Joe, here's another one. Tuesday, Shawn Duffy confirmed, is the first full paycheck that could be missed by air traffic controllers amid really what's been a shortage already from them since this shutdown has started. >> To think we're clearing another pay cycle here is pretty remarkable. It was two weeks ago we were talking about how that might be an inflection point. But uh it's true in air traffic controllers long before the shutdown uh ever hit and we were reminded of this with that terrible tragic uh crash here in Washington DC in many cases working 60hour weeks uh exhausted away from their families and to remove their paychecks right now is a very difficult circumstance knowing we simply cannot train more air traffic controllers fast enough to fill these towers. So, yes, the airline uh component here is a big one. We talked about the expiration of SNAP benefits the 1st of November, the open enrollment, all of these items are creating a pretty major point of pressure here on Capitol Hill that brought us to our conversation with Hakee Jeff. >> Right. Exactly. And just to put a finer point on that November first date for SNAP benefits, we really are seeing this become an issue on both sides of the aisle. But I can say that I spoke to one senior aid to Democratic leader Chuck Schumer today who told me that it really is the moderates within the Democratic conference that appear to be really making this a a pressure point and that is something that we should watch as we inch closer to that date. >> That's for sure. Uh the affforementioned David Gura is still in Washington and graces our desk right now here on Balance of Power. of course, Bloomberg correspondent, host of the Big Take podcast, which is why you sat down uh for a good chunk of time with Hakee Jeff in his office. The sense of frustration was, I'm guessing, palpable. >> It It was. And as you both know, this is such a unique shutdown, the circumstances of it, how it's unfolding, and you've done such a good job of laying out all the potential pressure points here in the days to come. So far, over the course of these 23 days, a lot of people have been shielded from those effects, the effects of the shutdown. Uh we've seen Russell Vote, the head of OM, moving a lot of things around uh to make it so that some people are paid, others aren't. Some programs are kept running, others aren't. That can only last so long, one would think. Um and as we look ahead to Friday of this week to Tuesday of next week to when open enrollment begins for health insurance, um pressure is going to mount. So it was a good time to sit down with the minority leader just to get a sense of sort of how this is all unfolding from his vantage in a very quiet capital building today. I asked him just sort of what kind of conversations are happening among Democrats and Republicans and here's what he had to say. >> As Democrats, we continue to make clear to our Republican colleagues that we will sit down with them anytime, any place in order to reopen the government to negotiate a bipartisan agreement that actually makes life better for the American people in terms of spending and funding. But we also have to decisively address the Republican healthcare crisis. We've maintained that position from the very beginning before Republicans shut the government down and during the entirety of the shutdown because it is a real crisis that has been created at this moment, particularly as it relates to the urgent need to extend the Affordable Care Act tax credits. >> As you and I are speaking, the House Speaker is doing a press conference just down the hall. What is the level of engagement? Do you pass one another? Are you speaking with one another? Are Democrats talking to Republicans right now? Uh the conversations have been very limited unfortunately because Donald Trump has not given House Republican leaders or Senate Republican leaders permission to negotiate reinforcing the principle from our view that he made the decision to shut the government down. Uh they want to continue to inflict pain on federal employees. They've done that from the very beginning of Donald Trump's presidency. In fact, uh, more than 200,000 federal employees had been forced off the job prior to the government shutdown. And this is something that we've continued to see them build upon during the shutdown. Until Donald Trump gets serious about reopening the government, unfortunately, we're going to remain in this situation and everyday Americans are being hurt. >> He's getting ready to take a trip to Asia. Is it appropriate for him to be doing that at this moment when the government is is shut down? >> I I think that the president has a responsibility both domestically and throughout the world. However, what has been irresponsible is that throughout this shutdown, he's found more time to golf uh than he has to engage with Democrats on Capitol Hill. He's decided to try to steal $230 million in taxpayer funds from the Department of Injustice. Donald Trump and his administration have found $40 billion to bail out a right-wing wannabe dictator in Argentina and can't find a dime to extend the Affordable Care Act tax credits to keep health care affordable for tens of millions of Americans. And on top of all of that, uh, they are demolishing the east wing of the White House in ways that have appropriately horrified the American people. >> I want to ask you about potential off-ramps and Tammy Baldwin, the senator from Wisconsin Democrat, said Trump is the off-ramp at this point. Do do you agree with that assessment? And has there been any kind of outreach or dialogue between you and the White House? Uh, Lader Schumer made clear earlier this week that we have reached out to the White House again uh to indicate that prior to Trump's departure uh for Asia, he should sit down with Democrats to find a path forward to reopen the government to enter into a bipartisan spending agreement and to address the healthcare crisis that Marjgerie Taylor Green acknowledges must be addressed and that traditional conservatives who are in the toughest seats in the country have now publicly acknowledged this week needs to be addressed. >> Can I ask you a question of congressional mechanics, and that is, can the Democratic leader pick up the phone, call the White House, and reasonably expect the president's going to take that phone call? Are you able to do that? And if so, what's keeping you from having that dial? >> Well, traditionally, that probably is the case, but in this White House, uh, that's very much unclear. Donald Trump didn't have a meeting, uh, with House or Senate Democratic leadership until 2 days prior to the government shutting down. >> It was opening night at the Garden last night. Knicks versus Cavs, Knicks 1119 to 111, also the final mayoral debate in New York City. Did you watch it? Have you kept up with what happened on stage last night? >> Uh, I wasn't able to catch the debate live. I did catch the final few moments of the Knicks game, I do admit. Uh, but the debate had already ended at that point by time uh my day ended. I did think it was interesting yesterday and a strong step uh that was taken by Zoron, the Democratic nominee, when he indicated his intention to retain our current police commissioner, Jessica Tish. I think that probably will provide a lot of comfort to people uh throughout the city of New York. She's done a great job. She's well respected. We're a diverse city. Uh and it'll be interesting to see how that is received upon my return home. >> Uh you've been asked about this a thousand times. Let me ask a thousand1 times. Um, are you prepared to endorse the Democratic nominee for mayor of New York City? >> Well, I'm I'm what I'll say is I'm prepared to weigh in in advance of early voting and early voting days away. >> Early voting starts on Saturday. >> Yeah. Um, what's what's holding you up? I mean, what are the issues that you're still concerned about? I know that you said the last time you were asked about this. You're going to have a conversation with Sor Mandani, another conversation. >> What's left >> undisussed? Well, I hope to speak to him today and tomorrow. And I, in fact, I plan on speaking to him today uh and tomorrow. And I think my from my standpoint, look, um I was prepared to try to bring this to a close one way or the other several weeks ago and then the government shutdown hit. And honestly, David, it's been all encompassing because this is a traumatic moment for the country that this has been inflicted on the American people. And then layer on top of it, right, just shutting the government down as Republicans have done is very problematic. uh but trying to communicate with the American people why we as Democrats also believe that addressing the Republican healthcare crisis is necessary and explaining the entirety of the assault on their health care that has occurred this year. beginning with the one big ugly bill and the largest cut to Medicaid in American history and the fact that their hospitals and nursing homes and community-based health centers are closing all across the country, home care will be adversely affected, the possible cut to Medicare at the end of the year, the Republican refusal to extend the Affordable Care Act tax credits, and the threats that they're now making to even try to repeal the Affordable Care Act and the assault on public health infrastructure. This is extraordinary stuff. We've never seen anything like this uh in the history of the country, which is why we believe it needs to be decisively addressed along with, of course, reopening the government, standing by our hardworking federal civil servants uh and making sure that we can enact a bipartisan spending agreement. So, it's been all-encompassing, you know, for the last uh several weeks. That said, uh I do have a sense of obligation to weigh in one way or the other in terms of the mayor's race in advance of early voting. So, I did watch the debate and the themes of criticism that came up from the other two candidates were he's inexperienced and his comments on the Middle East are problematic. Are those likewise the same issues that you want to talk to him more about? What what's left unsaid between the two of you? >> Well, I've certainly already publicly uh communicated and privately communicated some of my concerns with respect to some of the views that he's expressed uh in terms of foreign policy. That said, um I believe his relentless focus on affordability is the right focus. The question, you know, becomes for any mayor, for any executive, how are you going to implement uh that objective? Because it's the right objective. Uh but he's got to navigate a treacherous governmental terrain in terms of the city, state, and most significantly the federal government. uh because it's clear that Donald Trump has it out uh for Democratic le cities all across the country and we've got to be prepared for the fact that Donald Trump is coming for New York. >> I guess my question is one of confusion. So I sat down with Governor Cuomo and in that conversation he said uh I'm a Democrat. My dad was a Democrat. He's really taking up that mantle. Of course he lost the primary. He's running as an an independent. Isn't there an element here of of confusion that in this vacuum >> and you could I guess do something to close that vacuum. he's he's able to take up that mantle to the detriment of the dulyeleed Democratic nominee. >> Well, it's interesting cuz he is running as an independent, so he's not the Democratic nominee, but of course, he has a long history uh as a Democrat. I think some of the concerns uh that I've seen articulated however is well what is the actual path to victory given the inability to convince a majority of Democrats in the primary uh that you were the right person uh to lead the city moving forward at this moment. >> Um a fascinating conversation wide ranging. We did talk a lot about um the Democratic party and what it can learn from the race in New York as well. also picking up on what he's just saying there a moment ago. I mean Zaran Mandati had a um substantial win in that Democratic primary. What does he take away from that as he looks at >> the political terrain across this country which of course is a huge part of the minority leader's job to assess who's running for what? >> What primaries are um ones that can be contended. Um we talked about kind of younger voters that say that they might have how they've been animated by some of these issues. And we came back to that notion of affordability which again he got the the the mayoral candidate New York got a lot of praise from Hakeim Jeff about focusing on affordability in a very very very singular way. >> Well, affordability also perhaps lends to this conversation about the shutdown. I was pretty struck with the Democratic leader telling you that this is a traumatic moment for our country in his words. We're of course tracking this vote on Capitol Hill tonight. Potentially could pay federal some federal workers but doesn't look poised to pass. Did you get any sense from uh leader Jeff that the pay aspect, the federal workers, they're potentially going to miss this full paycheck tomorrow that that is really leaning and weighing on the Democratic party? >> I think it is certainly weighing on him and he said as much, but you heard from him in that conversation uh his adamance that this not be doled out selectively that you can't prioritize some federal workers over other ones in the way in which Republicans in the White House have have proposed here. So again, getting back to those pressure points, I think there's a awareness here among Democrats and Republicans as well that this is going to be a moment when, for lack of a better phrase, a lot of Americans wake up to the fact that this is happening. It's going to really hit them hard. And by virtue of how this has all played out, that last paycheck wasn't one that was as as seismic as this one is likely to be. Um, so yes, I think he he recognizes it's going to weigh on a lot of people. Is it enough to kind of push him to make any concessions? No, it didn't seem like he he felt that way. >> Do we really believe he didn't watch the debate last night? I mean, I believe he caught the end of the game. Yes, >> he didn't watch that. Wasn't on in the office. >> I mean, uh, two days away from I can only believe what he's saying there. But I will say in New York where I live, >> these were two duel. I mean, you had both candidates, both Cuomo, uh, and Mandani going to the stage. First thing they said was, "Sorry that you're not able to watch the Knicks game tonight, but thank you very much for watching this debate." So, there's a recognition of the fact that there was some split screen programming there in New York last night. >> Absolutely. So, if you'd done the interview tomorrow, we'd have the endorsement, I guess. >> Gosh, I didn't feel like I got 99% of the way there based on what he was saying about his obligations. >> So, what do you think of that? And did he wait so long that it doesn't matter in New York? >> That's a really great question. One I've really wrestled with over the last few weeks. I spoke with Governor Cuomo a few weeks back. How much does an endorsement like this matter? Of course, we haven't heard from Senator Schumer either. And in the past, both of them have have weighed in on mayoral races. >> If you look at how well Mandani performed in that Democratic primary, >> he did so without these endorsements. That's fine. So, I think you rais a really great point, which is how much does this really matter to the base of support that's really elevated Storm Mandani? I don't think that it matters that much. But again, you heard there from Hakee Jeff. He feels an obligation to do so because of his his position he's in and that he's in the eth district of of New York. He feels like he has to do it. So, we'll see if it in fact he does it here in the next, as I said, two days. >> Yeah. >> Well, I was going to ask where where this is headed. How likely is it that we are going to see something from the leader? >> Look, I'm I'm guessing here based on the conversation, the tone that he took, I think he's likely to do it. I think he feels that obligation is a real one. But again, time is ticking. So, >> there's a lot more of that interview by the way. The Big Tape podcast about to drop just dropped. >> Just dropped 20 minutes in length, so you hear the whole thing. Apple, Spotify, you know the drill. I go through this every day. Isn't the Big Take podcast with our good friend David Gurus. It's great to have you back in DC, David, and thank you for the great reporting. I'm Joe Matthew alongside Tyler Kendall. This is Bloomberg. Stay with us on Balance of Power. We'll have much more coming up after this. >> You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5:00 p. p.m. Eastern >> on Apple CarPlay and Android Auto with the Bloomberg Business App. >> Listen on demand wherever you get your podcasts or watch us live on YouTube. The Thursday edition of Balance Power on Bloomberg television and radio. We have some breaking news happening just moments ago. Senate Democrats blocking a Republicanbacked measure aimed at paying military troops and some federal workers during the US government shutdown. It is the latest sign that we are no closer to any agreement to reopen the government. Joe, a pretty partisan vote here. It looks like it failed to advance 54 to 45. Of course, as you all know, 60 votes are needed in order to get such a measure through. >> Yeah, this is uh something that we knew was going to happen. We in fact talked to the author of that legislation last evening, Senator Ron Johnson, who was struggling with this idea of not necessarily having the votes for it to pass knowing that Democrats were filibustering against this measure. And a lot of campaign ads are probably going to be made from those speeches. Right. >> Right. Exactly. But Democrats, of course, have put up their own measures and they're arguing when it comes to this bill in particular, it's going to give the administration too much power to determine who gets paid and who doesn't. Then ultimately that's how this bill really did fail today in the US Senate. >> Yeah, it's the your take is spot on. Democrats have two bills of their own today that they're going to be offering. Chris Van Holland, Democrat from Maryland, has one. Gary Peters of Michigan. The other uh those are going to fail as well. So this swirl continues and the affforementioned Ron Johnson, the Republican from Wisconsin, tried to make the case for his bill last evening here on Bloomberg. Listen, >> clearly the current system is utterly broken right now. We we just crossed $ 38 trillion in debt. And the definition of insanity is doing the same thing over and over again expecting different results. So again, we're in this dysfunction. Let's not make federal workers who are being forced to pay pay for our dysfunction. Not a difficult case to make. This is legislation that would pay employees who have been forced to stay on the job, not furoughed, but still as essential workers continue working. Democrats are concerned, as Tyler mentioned, that's gives the administration too much authority and in fact makes it a case of some get paid and some don't and we shouldn't be making decisions like that now with 750,000 federal workers furoughed. See how our panel feels about it. Bloomberg Politics contributors Adam Hajj and Rick Davis are with us. Adam, our Democratic strategist, managing partner at Bully Pulpit International. Rick, Republican strategist and partner at Stone Court Capital. Uh, what do you think about this, Rick? We knew it was going to fail and this is going to be fodder for Republicans in the midterms. >> Yeah. This is just a sort of continuation of the exercise that um you know leaders uh Thun has been doing every day pushed putting up the clean CR for a vote it fails do it again tomorrow it fails. Uh I think there have been 11 or 12 votes now on that. Um uh uh and and so this is sort of a another way of saying the same thing, which is, you know, we want to try to create uh some progress on government reopening, but unless we've got a deal across the board on all these various issues that the Democrats have raised, um nothing is going to pass. And you know, I actually think it may have a pretty salutoy effect on the employees because these are the folks who are sitting around going, "Now wait a minute, we're the victims. uh you guys are dysfunctional on Capitol Hill and maybe we just start not showing up for work. And you know, I I think if I were in a union in the uh federal government, which is almost laughable that I would be in a union in the federal government, um you would have to argue that these union managers should start telling their employees, hey, you know, maybe you shouldn't show up tomorrow. Maybe we ought to do a walk out. Maybe I mean, like I don't hear any of that happening. And yet that's a classic union strategy. >> Well, Adam, what's your take and what was the riskreward calculus here for Democrats? Because as Joe mentioned, this seems like perfect fodder for Republicans as they start to make their midterm election campaign ads. >> I think the thing to keep in mind is that you shouldn't pick and choose who does or doesn't get paid. That's a basic principle. Just Joe mentioned, Democrats have put forward a proposal uh to pay all federal employees as the law makes clear. I think the fact that the White House has said that they may or may not fire some folks and keep some folks from quote unquote Democrat run agencies as if they're not the leaders of the entire US federal government. I think gives Democrats a little bit of pause here. I think the big the biggest takeaway is that through all all of this debate throughout the entire shutdown, it really has become a topic about healthcare and what will happen on November 1st when people start seeing some of those real uh price increases and get that sticker shock. And Democrats have said, "Look, let's negotiate on this bill. Come to Washington. Let's do it." The problem for the president, I think the more he does go and play golf or does take the trip to Asia, it raises questions about whether he's serious about getting a deal and he is the only one who can get a deal done uh to stop a government shutdown. >> What do you think about the timing of this trip, Rick? Because it looks like the government will be shut down for at least another week and we're going to be knocking on the door of November 1st here by the time uh the president gets back to the United States. That's when SNAP benefits are going to start expiring and so forth. This gives Democrats, as we heard from Hakeim Jeff a little while ago, a pretty good talking point as well. Should the president cancel? >> No. Um um I I kind of feel for uh the president. This is actually the one time he hasn't exactly told uh Thoon and Johnson what to do. And that and then he gets criticized for usurping Congress. Right. Here's Congress's chance to go and do their job. Uh the president has a job to do. He should go to Asia. He should meet withQi. He should figure out a way past these trade barriers that that we have installed and and and make sure that Asia doesn't erupt into either a trade war or a shooting war. I mean, like I'd say that's important and that's the president's job and he didn't pick the timing of this, but but I just can't fathom why uh there isn't more leadership uh by the Republican leadership in the House and Senate. It's their House and Senate and they have been criticized heavily for being usurped by the White House and here's an opportunity that they can do something on their own to get government back working and yet they seem unable to finding a strategy that will work 22 days in. And I mean I don't know about you Joe but like that's a long time to be thinking oh we'll just keep doing the same thing and that'll work over time. that that is the definition of insanity. >> So, Adam, is it actually more to perhaps Democrats benefit if President Trump does get more involved with these conversations, whether that is before or likely after he comes back from this trip to Asia? >> I mean, on this I just listen to some of the president's own words. I mean, he has clearly articulated in some of his more candid moments that he knows his healthcare issue is a real anchor around the political standing of the Republican party. It's shocking maybe to some, but like the fact that Marjorie Taylor Green even as Hakeem Jeff alluded to is essentially saying the same thing that House Democrats have been saying that this is a real issue. We got to solve this issue. It hurts workingass families who are going to pay higher premiums for healthcare. That is I think the president understands the politics of it. I think John Thoon and and uh to more a greater extent speaker Johnson has politics in his caucus in their conference that makes it harder to do a deal on the ACA. But at the end of the day, as Rick was alluded to, the math of the vote of the Senate is 60 votes. The way out of this is doing a deal that gets 60 votes to reopen the government and to tackle the healthcare crisis that some of the Republicans created. And so that is I think that is the key. And the sooner we get there, the sooner this will all be over. >> We have an update on the ballroom project that we need to ask you both about. Of course, happening at the White House right now. As the president leaves, I guess they'll be able to do some serious work over there because it is a massive construction site. And according to some, it looks like somebody dropped a bomb on the east wing. There's an update here. Just even in the last 24 hours, President Trump has now decided to demolish the entire east wing of the White House. to make room for the ballroom, remembering that he had said back in July when this was first announced, the construction of the ballroom, uh that it would not interfere, this is a quote, would not interfere with the current building. The project's plans paid total respect, he said, to the existing structures architectural style. Two things have happened since then. One, the price tag has gone up $100 million to $300 million. And as the president explained yesterday in the Oval Office, they had no choice but to tear down the entire east wing. Listen, >> we determined that uh after really a tremendous amount of study with some of the best architects in the world, we determined that really knocking it down, trying to use a little section, you know, the east wing was not much. It was not much left from the original. It was uh over the course of a hundred years, it was changed. Well, it's gone or will be soon. I actually took a walk by there last evening, Rick, uh, and and realized you actually cannot walk through the complex on Pennsylvania Avenue. There's a massive wall there. They've walled off Lafayette Park and there's a wall running along the Treasury Department, so you cannot see uh, this demolition taking place or take pictures of it. You've worked in the White House for a couple of administrations. What did you think when you saw the entire East Wing is coming down? you know, I'm I'm kind of torn. Um um you know, it it is a historic location, right? And and it is a rare thing uh to have in the middle of the nation's capital, both the office and the residence of a president in one place. I mean, it's a wonderful Yep. >> kind of construct for the American people. That being said, there's been a lot of changes to the White House, the West Wing, the East Wing over many, many uh years. And and so change in its own right has already been happening quite a bit. And and and it's not the same place that it was initially. And the Brits burned it down in the 1812 war. So like there's been a lot of changes in that place over time. Uh and yet at the same time uh and I do think they could use more function rooms like this. I mean you you almost have to now do things inside the White House compound for security reasons. I mean we used to go over and do events for the White House in like the Daughters of the American Revolution Hall because it was just down the street and we could walk there. Can't really do that anymore. >> So uh I'm kind of I'm kind of torn because I do think the facility needs upgrading. Uh, and you do need a bigger ballroom capability. Um, the East Room just doesn't hack it for the kinds of things that are considered normal today for heads of state. Uh, and uh, and yet at the same time, I'm I'm feeling kind of sad about it. >> All right, our political panel today, both Bloomberg Politics contributors, Rick Davis and Adam Hodgej. Thank you both so much. And a redhead crossing the terminal right now. President Trump confirms he will meet with Chinese President Xi Jinping. That's next Thursday. That's according to the White House press briefing that's currently underway. We'll get into that and a lot more when it comes to foreign policy, including moves against Russia. That's up ahead. Stick with us. This is Bloomberg. >> Stay with us on Balance of Power. We'll have much more coming up after this. >> You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5:00 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say, "Alexa, play Bloomberg 11:30." >> Thanks for being with us here on the Thursday edition of Balance of Power on Bloomberg TV and radio with breaking news from the White House. This just came from the press secretary who's at the podium right now in the briefing room with some opening remarks making clear that the meeting will take place. President Trump and Chinese President Xi will sit down together on October 30th. That's a week from today. Knowing the president is about to be wheels up this weekend uh toward the apex summit in South Korea. Tyler, you're going to be along for the ride on this trip. This is about as high stakes as it gets. >> As high stakes, highly anticipated, Joe, it's going to happen on the sidelines likely of the Apex summit that's happening in South Korea. There is a lot at stake in this meeting, but I have to say our analysts at Bloomberg Economics say that their base case right now is that we're likely looking at a 90-day extension to that tariff truce that's in place that's set to expire on November 10th if everything goes as planned. But of course, a lot on the table. Everything from export curbs to soybeans to also China's imports of Russian energy supplies. Which brings us to this latest move from the White House moving to sanction two of the largest Russian oil companies. And uh we we heard this come out of the White House yesterday after President Trump had met with the NATO Secretary General Mark Ruta. Uh he explained earlier uh sort of where these negotiations where with Russia currently stand. Take a listen to part of what he had to say. >> We canled the meeting with President Putin. It just it didn't feel right to me. It didn't feel like we were going to get to the place we have to get, so I canled it, but we'll do it in the future. >> Mr. President, can you tell us a little bit about why you're elevating sanctions against Russia right now? What's currently? >> I just felt it was time. We've waited a long time. I thought that we'd go long before the Middle East. And Mark, as you know, we did the Middle East plus seven. So, we did seven different wars. >> That was the president yesterday at the White House. The price of oil soaring today after the US announced these sanctions against two of the largest Russian oil companies. It's really considered a change of course for President Trump. This marks the first direct US measures on Russia of this term. WTI currently hovering around $62 a barrel. And Bloomberg estimates that the Russian companies that were blacklisted, one is state controlled, the other is privately held together. They account for nearly 50% of Russia's crude oil exports. For all of the latest and to look into whether or not this is going to make a difference when it comes to the Kremlin's calculus, we're joined now by Mike Mclo, Bloomberg intelligence senior commodity strategist. Mike, thanks so much for joining us. Can you answer that question? Can you put this into context? Just how difficult will it be for Russian barrels to reach the market after this move from the Treasury Department? Well, that's the thing about Russian barrels, any type of sanctions, they always find their way to the market. It's just a question how they do it, where they do it. And you also mentioned the largest one of the largest buyer of Russian oil is China. Yet, China's total demand is declining. So, Russia's becoming increasingly dependent on its unlimited friendship with President Z to to to take that oil. But the bottom line for crude oil is we've had a big bounce in crude oil in a bare market from lows. The member was trading $57 the other the other day. The low for the year is 55 and last year's low is 65. So it's still a very much a bare market. It's bouncing. At the same time, this week we had a pretty significant correction in gold. Now that's a bull market that's backed up. But I look at crude oil is it's a bare market. Someone has to shift. And the bottom line I'll end with is crude oil's going up. I'm sorry. Crude oil is going down despite this record setting stock market. Just imagine if we got a little pullback in the stock market. Crude oil is ready, I think, for the next input is to push it towards those lower lows and it needs something unusual like this to keep at least somewhat bid in the near term. >> Huh. >> So, you're not moving off your forecast though, right? Mike McLan, you've been very consistent and you have been correct. Are we going back below $50? >> Oh, yes. I I'm sticking with that one, Joe. I don't know what's going to change it. And just the fact that crude oil is down about 15% this year and the stock market's up about 15%. That's divergent deflationary weakness. But it's not alone. Corn, soybeans, wheat, the grains are all doing the same thing. Natural gas has a problem and it's priced for a colder than normal winter. Yet, we might get normal global, you know, warming trends. And crude oil is just over supplied. And also, let's remember what's changed in the history of crude oil's last 20 years when it bottom around $40 a barrel since 2008 is US was a net large importer then. Now, US is one of the largest exporter on the planet, a major producer. And the rest of the world, for instance, China is not demanding as much anymore. is just stuck in a normal bare market. I don't know what shifts it, but I'm conf I'm fearful what can really make it accelerate and that's just a little backup in beta. >> Got it. He's the best at this. Mike Mclo with us live from Miami. Bloomberg Intelligence senior commodity analyst. Mike, thank you so much. Right now, WTI, West Texas Intermediate, as Tyler mentioned, right below $62 a barrel, up almost 6%. Brent crude also rising almost 6% to $66 a barrel. So, we're seeing an instant reaction here in the financial markets. the question, what will be the diplomatic reaction to this? And for help, we turn to an expert, James Jeffrey. The former ambassador uh is with us right now on Bloomberg TV and radio. Former ambassador uh and longtime diplomat here in Washington. It's great to have you back, sir. Does this decision by the Trump administration to sanction Russian oil bring us closer to an end to this war? because so far sanctions have not done a lot to alter Vladimir Putin's behavior. >> No, that's true. But first of all, thanks for having me on. Um, >> yes, sir. >> This war is being fought in every sense as a nutritional campaign. Think of World War I, at least in the West, almost four years with very little change on the ground. So therefore, little things are not going to make a difference decisively. Rather, they add up. So you take what we just heard, this is pretty significant. This is a major hit. In the end, the Russians will get their oil out, will be able to absorb that because as you're have been reporting, uh oil prices per barrel have been quite low around $60. They're up a bit now. But uh this is going to hurt the Russians. In addition, the Trump administration has been apparently uh greenlighting intelligence for u long range European missiles that the Ukrainians have to hit targets deep inside Russia. You have the campaign against refineries by the Ukrainians using their own drones. And you have the Europeans moving forward on a slower timetable to cut off all Russian gas uh that they're still importing. Bit by bit, this is a making things harder for the Russians. Their economy is at a point where it's not growing and they can't produce uh more military capability, although they can sustain what they have. And two, it sends a signal politically to Putin that our will has not collectively been broken. That's important because he thinks he can wear down Zalinski, wear down the Europeans, and wear down Trump. >> Mr. Mr. Ambassador, much to Joe's point earlier about this idea that we have seen sanctions before, President Trump himself has pointed to that as a reason why he waited. Uh he's previously been asked why he wouldn't do this. He said he wasn't sure if it would deter Russia or not. But then he said that the time is right now. If we sort of just retrace our steps from these past few weeks, is there any moment that you can point to that you think might have been the tipping point here or have we been creeping along towards this end goal all along? >> Uh, we've been creeping along, but I would say the turning point was after the president's recent call with Putin where he thought and probably correctly that Putin gave him some signal, some hints that he could be flexible on a ceasefire and a termination of the war. There was then a follow-up call between Secretary Rubio and the awful long-term Russian foreign minister Lavro, Mr. No. Well, uh, apparently uh, Rubio reported back that the Russians were not moving. So, uh, Trump, who had of course invited Putin to Alaska, was ready to have another summit in Budapest, decided this guy is playing with him. So bang, he cancels the uh Budapest meeting and also he's taking these additional steps. Trump would like to see a negotiated settlement of this war because he doesn't see it leading to a Ukraine win and he needs to do business with Russia. He needs to do business with China, etc. But he's not going to cave on this and that's another uh today is another signal of that. >> Is he correct on his assumptions about the battlefield? Ambassador, I'm wondering where your thoughts are at this point as President Zilinski requests Tomahawk missiles to turn the tide in this war. We know that they're also using long range missiles even without the United States contribution being provided by Europe. These uh these desert shadow or dark shadow uh missiles, if I'm using the term correctly, could strike deep into Russia. Is that what Ukraine needs? Well, Ukraine has those from the French and from the British. And as I said, they use American components and intelligence, and we've just greenlighted long range strikes into key infrastructure inside Russia for them. So, that's another big step. The Tomahawks would help further both as a signal of American uh uh strength and willingness to push back on Putin and also marginally on the battlefield. But basically nothing much is going to change the situation on the front unless one or the other side collapses uh psychologically, politically or economically. And neither Ukraine nor Russia seem to be in that position now. So it's going to drag on unless we can get negotiations going. >> Well, you alluded to it there with how some of our allies are also providing, of course, military assistance and and weaponry to Ukraine. The sanctions package that we were talking about seems to be coming in concert with the European Union this morning approving its 19th package of measures, including that there's these plans to ban Russian LG imports into the block by early next year. Can you talk to us about how regional partners have been so important to this effort to the White House's stance when it comes to the future of the war in Ukraine, particularly as we had the NATO Secretary General Mark Reta there just yesterday? >> Right. And he is a guy who was able to turn Trump around and uh explain to Trump why Europe and Ukraine are important. He's playing a huge positive role. Uh but uh the Europeans have funded uh when you look at both weapons including buying them from us and economic assistance, not to speak of taking in refugees, a greater burden than the United States has, but that's reasonable. We have global responsibilities. They don't and they're closer. Uh they're also a lot more Europeans than Americans. So that's okay. But they are doing a good job. these latest sanctions uh some come into effect next year, some not until 2027. But the key thing is there has been uh broadly defined a dramatic decline in hydrocarbon exports from Russia into Europe since 2022, particularly when the Northstream uh gas pipeline was cut off. What we're seeing now is LNG shipments and some oil shipments. uh they need to be uh uh cut off. That will take place as I said over the next uh uh 12 to 24 months. It's a good signal. Uh in the short term, it won't have much impact though. The uh Trump oil sanctions that we were just announced will have a bigger effect, I think. >> Interesting. So, with our remaining moment, Mr. Ambassador, is there a need for secondary sanctions has been drafted on Capitol Hill or should the president be in charge of this from the White House? Uh the president always regardless of the president I'm speaking as a guy who worked for many of them biased uh should have the final say on life or death things including a conflict with another nuclear power. Uh but he needs to keep that in his back pocket. Uh he needs to escalate. He determines like Kennedy did in the Cuban crisis how quickly and to what degree he escalates. But these things are good tools. be it the tomahawks, be it these congressional sanctions, secondary ones, uh if we need to put pressure on and he will eventually, I think, if uh Putin doesn't uh change his position. >> All right, Mr. Ambassador James Jeffrey, former ambassador to Iraq and Turkey and special envoy to the global coalition to defeat ISIS. Thank you so much for joining us. >> Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already, Apple, Spotify, or wherever you get your podcasts. And you can find us live every weekday from Washington DC at noon time Eastern at bloomberg.com.