May 23, 2025 • 31 mins
The passage of the Republicans’ tax-cut bill in the House and what happens next — with ramifications for multinational corporations, clean-energy companies like First Solar, and wireless carriers such as AT&T, T-Mobile and Verizon — are among the key catalysts Bloomberg Intelligence litigation and policy analysts are watching this week. The team also discussed stablecoin legislation advancing in the Senate and plans to attach credit card bills to it, with implications for card networks including Visa, Mastercard, American Express, and Capital One/Discover. We also discussed the hurdles to Fannie Mae and Freddie Mac exiting conservatorship and government ownership. Finally, we discussed the several lawsuits challenging US tariffs.
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Episode Transcript
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Speaker 1 (00:15):
Hello, and welcome to the Votes in Verdicts podcast hosted
by the Litigation and Policy team at Bloomberg Intelligence, the
investment research platform of Bloomberg LP on the Bloomberg terminal.
Bloomberg Intelligence has five hundred analysts and strategists working across
the globe and focused on all major markets. Our coverage
includes over two thousand equities and credits, and we have
(00:37):
outlooks on more than ninety industries and one hundred market industries,
currencies and commodities. This podcast series examines the intersection of
business policy and law, and today's are weekly check in
on the litigation and policy catalysts that we're watching and
that we think will impact companies across different sectors and
(00:58):
different industries. My name's Elliott Stein. I'm an analyst with
Bloomberg Intelligence covering litigation in the financial sector. Today is
May twenty second, and since things move quickly, will timestamp this.
It's about two thirty pm Eastern daylight time. I'm delighted
(01:18):
today is always to be joined by a handful of
my colleagues on the Litigation and policy team. Here we
have Nathan Dean and Matt Shettenhelm down in DC and
We also have Holly from who's based up here in
New York with me as a reminder. You can find
all of our research on the Bloomberg terminal at BI go.
And you can find all of our litigation and policy
(01:40):
research as well on our dashboard which is available at
BI laws go. All right, let's jump into the content, Nathan,
Let's bring you in big day yesterday for the Trump
administration getting the one big beautiful bill across the finish
line in the House. At least maybe come in and
(02:01):
tell us sort of what the highlights are and where
it goes from here.
Speaker 2 (02:06):
Yeah, So that it passed the House two hundred and
fifteen to two hundred and fourteen, one person margin. It
actually would have had two. But we discovered that Representative
garbar Reno from Suffolk County fell asleep.
Speaker 3 (02:19):
In the back the vote.
Speaker 1 (02:20):
Hated way that happens.
Speaker 2 (02:22):
Representative there was a representative from Arizona and did no
word where he was, but he was somewhere in the capitol.
Rumor has it that he was also sleeping.
Speaker 1 (02:30):
You know, it's funny, funny. I didn't mention that because
I was wondering when I saw the two fifteenth to
two fourteen vote. The first thing I came to mind,
and this was sort of morbid and I hated to
think about it, was that Congressman Jerry Connolly. I think
you're congressman right in northern from Northern Virginia sadly passed
away what a couple of days ago, And I was
wondering if that made a difference, but if it probably
(02:51):
wouldn't have. If there were two votes on the Republican side,
who probably would have showed up if they had to?
Speaker 2 (02:57):
Yeah, I think somebody probably would have, you know, because
they the speaker has the ability to keep the voter
open as long as he wishes, So I presume somebody
would have sent out a search party for Representative Garbarino
and found him sleep thinking about.
Speaker 1 (03:12):
Welcome him up in the back.
Speaker 2 (03:13):
So from what I heard, the rumor is that they'rerivving
him pretty hard on the Republican side right now. But anyway,
we digress. So, you know, the bill passed two hundred
fifteen to two hundred and fourteen. The amendments that came
in from the House Rules Committee essentially pushed up the
inflation reduction dec tax credits to twenty twenty eight from
twenty thirty one. There were Medicaid work requirements that came
(03:36):
in up until December of twenty twenty six, so it
actually got.
Speaker 3 (03:41):
A little bit more.
Speaker 2 (03:43):
You know, there were a little bit of nuggets for
the House Conservatives after it went through the House Rules Committee,
and then ultimately this is what passed. But for those
of v in the New York and New Jersey area,
your self deduction has gone from ten thousand to forty thousand,
up to an income phase out at five hundred thousand,
and then subsequently phased out at a rate to the
point where if you get if you earn more than
(04:03):
six hundred thousand, you know, there is no more salt
increase other than the ten thousand dollars cap where it
remains today. But you know, we'll say again, this is
a five point five trillion dollar bill. The bulk of
this is on the consumer side for taxes, so no
taxes on tips, no taxes on overtime, social Security, et cetera.
(04:24):
But then in terms of the cuts, it goes Medicaid
snap benefits in the Inflation Production Act. So it passes
the House and now goes to the Senate. Senate is
going to say thank you very much. They're going to
take it. They're going to look at it, and they're
going to throw it over their shoulder. They're going to
ignore it, and they are going essentially going to pick
and choose what they like from this bill and send
it back. Now, if you talk to the Republicans, there
are some of the Republicans out there that's saying that
(04:45):
the salt benefit could be scaled down as a portion
of this I think that's a there's a decent chance
to the Senate Republicans are going to try it. But
I go back to the idea that Senator or sorry,
Representative Mike Lawler will ultimately vote against this bill no
matter what, because those New York Republicans need salt or
else they are going to have a very difficult re
(05:06):
election chance in twenty twenty six. So I am you know,
I may be on a consensus on this one, but
I think the salt sticks to where it is when
it comes to medicated snap benefits. I do think that
the Republicans are going to scale back what the House
Conservatives have pushed.
Speaker 3 (05:20):
You know, work requirements are going to most.
Speaker 2 (05:22):
Likely be remaining in there, but maybe they don't kick
in in December twenty twenty sixth and talking to our
healthcare analyst Dwayne Wright, who's been on this program before.
He was telling me in the pantry earlier today that
it's going to be very difficult to institute a rulemaking
by that date. And so I wouldn't be surprised if
the Senate Republicans say, Okay, we're going to push that
out to twenty twenty eight or even after the election,
(05:45):
you know, the next presidential election.
Speaker 3 (05:46):
Same thing can be said for snap benefits.
Speaker 2 (05:48):
I think the most important thing, though, where we think
that the most ambiguity is on the Inflication Reduction Act
text credits. You know, at a high level, Senator Tom
Tillis in North Carolina and three other Senators have written
letter saying don't touch the IRA. The original House language
was fairly benign, I think, towards these solar tax credits,
and you subsequently saw increases in first solar and phase
(06:12):
and so forth. The House Conservative portion that which was
ultimately adopted by the House scaled a lot of that back,
moved it up forward, and as we speak, the solar
stocks minus first solar are really getting hammered at the moment.
A lot of this is also due to language over
the foreign entity ownership tax credits, meaning that if you're
a foreign entity, you can't take advantage of it.
Speaker 3 (06:33):
So I do think the.
Speaker 2 (06:34):
Senate's going to play around with that language. That's really
important if you're in the solar space. But I could
go on and on for an hour, so I'll think
I'll just leave it there by saying I think it's
going to pass by fourth of July.
Speaker 1 (06:45):
Oh wow in the Senate. Okay, yep, And that's been
the administration's goal, I guess. Anyways, have a nice signing
around July fourth.
Speaker 2 (06:52):
Yeah, I mean we're telling clients ninety percent by end
of year, eighty percent by August recess.
Speaker 1 (06:59):
And one of the big components was that to raise
the dead ceiling, right.
Speaker 2 (07:02):
Yeah, So the House plan raises it by four trillion.
The Senate idea was to raise it by five trillion.
I think it goes to the five trillion route, and
I don't think we have a death ceiling issue.
Speaker 1 (07:11):
Interesting, so you always like to say that this issue
is going to sort of blow up right around the
time you takification in the summer, but it might be good.
Speaker 2 (07:22):
No, Well, you know, I leave for June twenty fourth,
and so if we are going to essay four the
July timeframe, I think I may be logging in from
Europe sometimes.
Speaker 1 (07:32):
Oh that's true, that's true, all right. And then so
the other big thing in DC. I mean, you follow
a lot of big things in DC, but one of
the big things in the last couple of days is
some momentum or a lot of momentum on the stable
coin legislation. But there have also been some last men
and amendments thrown in. I don't know if you want
(07:53):
to talk about those.
Speaker 3 (07:54):
Yeah, so you know, this is the Genius Act.
Speaker 2 (07:56):
This is a stable coin bill that passed the first
initial vote with sixty six to thirty two. It attracted
sixteen Democrats, which is well enough to overcome any potential filbuster.
Speaker 3 (08:07):
So things were looking.
Speaker 2 (08:08):
Okay, and Senator Haggerty, who's the sponsor of the Republican
from Tennessee, was feeling pretty good. And then we had
a situation where Senator Roger Marshall of Kansas has attached
as an amendment the Credit Card Competition Act, which is
his and Senator Dick Durbin's bill that increases competition amongst
(08:28):
the credit Card networks for Visa MasterCard. The idea here
is is that if you're a bank, you have to
offer your retail merchants Visa and another company, MasterCard and
another company. And it can't be Visa and MasterCard the
way it's written, So essentially it's discover now Capital one,
an American Express, or the two other entities that could
potentially benefit from this, plus some other smaller competitors out there.
(08:49):
The problem with this is that you've now pitted the
banks versus the retailers and the airlines. The airlines are
involved because they are saying their credit card reward programs
and if anybody's flown through a LaGuardia or Reagan or
I saw this in Dallas about a month ago, big
adverts saying please don't touch our credit card airline programs.
So now you have a situation where banks versus retailers
(09:10):
versus airlines, and the dynamics of those supporters don't aren't
the dynamics of the sixty six thirty two vote. So
you may have a Democratic Senator who is voting in
favor of stable coins, but at the same time as
a huge proponent of the retail of the airlines or
the bank, and all of a sudden, now the vote
(09:33):
count just completely goes awry. At the same time, Senator
Josh Holly and Missouri said, well, if Senator Marshall's doing this,
I'm doing this as well. And he's made plans to
attach his bill that would cap credit card interest rates
at ten percent that he's teamed up with Bernie Sanders
on which President Trump has also campaigned on.
Speaker 3 (09:50):
So now it's gotten into a big mess.
Speaker 2 (09:52):
So I think what happens here is is that Senator
Hagey and he goes to everybody and says, look, folks,
this is just blown up into something way too big.
Let's just strip all the amendments, let's get rid of
this stuff, and let's just pass the bill.
Speaker 3 (10:04):
I think that happens next week.
Speaker 2 (10:05):
And so that's why in my notes that I put
out this morning, I think that while this visa MasterCard
bill is certainly a risk that's going to heat up
later this year, I just think the timing right now
is not going to happen. And I don't think Senator
Holly's bill of ten percent, well, you know, I don't
think that's going to be much of a factor.
Speaker 1 (10:20):
At all so they can vote on the amendments separately,
or Hagardy just forces these guys to sort of withdraw
the amendments.
Speaker 2 (10:27):
I think the latter is more likely than a vote,
because if you have a vote specifically in the amendment,
then it's going to be kind of awkward because I
may be in favor of this amendment, but I may
not be in favor of the stable coin bills.
Speaker 3 (10:38):
So it just gets really messy.
Speaker 2 (10:40):
And so I think members of both parties are kind
of hoping that Senator Haggarty works out a special deal,
or you know, Senator Thune works out a deal with
Senator Marshall says I'll give you a vote later this year.
Speaker 3 (10:52):
Let's just not do it right now as part of
the Genius Act, got it.
Speaker 2 (10:55):
The last thing is the Broader Crypto Market Structure Bill.
We're hearing House Financial Service Committee markup on June tenth.
Speaker 1 (11:03):
Oh interesting, okay, And obviously bitcoin is doing really well lately.
Presumably all these developments, uh are part of that. Okay, Nathan,
thanks Matt, let's bring you in. I know there was
some stuff you cover that was also in the One
(11:24):
Big Beautiful Bill related to spectrum auctions. And President Trump
uh posted on truth Social about it, I think a
couple of nights ago. You want to tell us what
what what that's all about?
Speaker 3 (11:35):
Yeah, that's right. Yeah.
Speaker 4 (11:36):
So this this is a this is a big deal
for for AT and T, T Mobile and Verizon. So
the you know, their their wireless business runs on federal
spectrum that they obtained through FCC auctions. But the problem
has been that the f c C can only hold
auctions if Congress empowers it to do that, and the
(12:00):
FCC's auction authority expired in March of twenty twenty three,
and since then, Congress has not been able to agree
on renewing that authority. This is the first time where
we're actually seeing some substantial progress on that. The House
build that passed includes a provision that says not later
(12:24):
than three years from passage of this act, the FCC
should auction two hundred megahertz of spectrum. Also, it says
that over the next couple of years, the FCC and
the Commerce Department should work to find spectrum that the
military is using, the federal government is using, and try
(12:45):
to take that back so that it can be auctioned
for private uses.
Speaker 3 (12:49):
And so.
Speaker 4 (12:51):
This has been the big problem is that the military
and the federal government is very cautious about giving up
its spectrum.
Speaker 3 (13:00):
And so.
Speaker 4 (13:02):
The fact that this has been able to get through
the House, that President Trump is advocating for it, I
think vodes really well that in some form, you know,
there's still work to be done in the Senate, but
I think in some form this is likely to become
law this year and that FCC auction the FCC is
likely to be back in business when it comes to
(13:23):
auctioning spectrum.
Speaker 1 (13:24):
And is this a partisan issue? I'm just trying to
understand where the where the divide is if it is.
Speaker 4 (13:31):
It really isn't you If you ask Democrats and Republicans,
they they would say, look, more spectrum is a good thing.
It's often you know, it often splits Republicans actually, because
some of them have been very sensitive about protecting military
uses of this spectrum. And on the other hand, you
have some that are very supportive of the market side
(13:55):
and how important wireless is to do everything. And so
you you've had some some some interesting splits, you know,
most often within the Republican party itself, but Democrats as well.
So it doesn't really break down directly on party. Ted
Cruz in the Senate has actually been pushing for even
(14:17):
more spectrum to be given up by the federal government.
But then there are other senators that are on the
opposite side of that, even Republican senators that say, no, no,
let's be careful here, let's let's not disrupt the federal
government and the military uses. So it's been a really
difficult issue. I think you're finally seeing progress. The House
bill doesn't go as far as Ted Cruz wanted it
(14:40):
too in grabbing that spectrum and auctioning it, and so
it might be the sort of compromise that that works
ultimately something along those lines. And I think you can't
understate how important it is to have President Trump advocating
for it. So that makes me think it happens in
some form this year.
Speaker 1 (14:58):
Super interesting.
Speaker 3 (15:00):
All Right.
Speaker 1 (15:00):
The other thing that happened in your space, I think
this just happened today where an FCC commissioner said that
you'll no longer be at the FCC when it holds
its meeting in June. What what's that about and what's
the impact?
Speaker 3 (15:16):
Yeah?
Speaker 4 (15:16):
So, so Jeffrey Starks is one of the Democrats at
the FCC. The FCC has been divided to Republicans to
two Democrats. That means Brendan Carr, the chairman, can't do
any of the controversial stuff that that that that that
splits the parties. With Jeffree Starks stepping down, all of
a sudden, it's two to one. The quorum requirement is
(15:39):
just three at the FCC, So they're good to go
now on you know, anything on President Trump's agenda, Brendan
Carr's agenda, it can start right now. Where I think
it matters for companies most importantly is broadcasters. TV and
radio broadcasters have been hamstrung by FCC caps on how
(15:59):
many they can own, how many TV stations, how many
radio stations they can own across the country. I think
the FCC will start pretty quickly, if not at its
June meeting shortly thereafter, on a rule making or multiple
rule makings to ease those limits. And I think that
that creates huge opportunities for a company like Nextstar, for
(16:22):
Sinclair Tegna to do deals to acquire more stations and
grow larger in a way that these FCC rules have
prevented for decades. And so look for that all to
get supercharged now that the Republicans haven't advantaged one other thing,
one other potential impact, not just broadcasters, internet companies. Brendan
(16:45):
Carr has said, look, we're going to go after big
tech companies with the Section two thirty liability shield. This
key liability shield that protects them from getting sued every
time something as someone posts something on the Internet that
causes harm in the real world. You can't sue your
social media company because of that under Section two thirty.
Running cars looking at ways to narrow that liability shield.
(17:09):
He's concerned about censorship from those companies and wants to
go after them to change their practices. And so now
with a two to one advantage, he can do that.
And so he could start a rulemaking on that or
some other other proceeding to take aim at Section two thirty,
which could be really problematic depending on how he targets
(17:30):
it for those companies.
Speaker 1 (17:32):
And how many commissioners does the SEC need in order
to vote on rules.
Speaker 4 (17:36):
It only needs three to function. Typically you have five,
and I think the law says something about it's supposed
to be you know, he can't put five Republicans on there.
He needs to even it out a little bit. I'm
not sure though, that he's going to put any Democrats
up there. There's nothing that actually requires him to nominate anymore,
as long as he has three to function, which he
(17:56):
does now he's at two to one. He's also nominated
another Republican, Olivia Truck. She's very close to clearing the Senate.
So he's pretty soon going to have three to one advantage.
And if we if we see what Trump's done with
other agencies like the FTC that that loan Democrat Ana Gomez,
she may not be long for the FCC. We've seen
(18:19):
Trump fire the Democrats at other agencies. Once olivia trustee
is approved, Trump will have three Republicans there. I don't
know that he needs to keep a fourth from the
other party. And so we might be moving into a
new world of just Republican you know, Republican control of
these agencies.
Speaker 1 (18:37):
Yeah, And so that's a great segue because just this
week there was a hearing on in the lawsuit by
the two FTC commissioners who were fired, challenging their termination.
And you know, this has happened across a number of
agencies where President Trump has fired the commissioners. Even though
(18:58):
the government statute have four cause removal restrictions. The President's
position is that those are unconstitutional because they impinge on
his executive authority. So that's a legal issue that's playing
out across multiple agencies. You know, we've started to see
some rulings, particularly in the NRB and Merit Systems Protection
(19:19):
Board cases, and you know, the ruins basically follow along
ideological lines, where you have judges appointed by Democrats saying
the four cause removal restriction is constitutional, and judges appointed
by Republicans saying it's unconstitutional and President Trump should be
(19:40):
allowed to fire these commissioners. We haven't gotten really a
definitive ruin from the Supreme Court on any of these
cases yet, but that's where it's headed, and you know,
just the way things are headed. I expect them eventually
to narrow the holding of Humphrey's Executor, which was the
nineteen thirty five Supreme Court case that upheld for cause
(20:00):
removal restrictions. But I think that's that's already been narrowed
recently in other Supreme Court cases, and I expect it
to be narrowed more clearly.
Speaker 4 (20:09):
And the interesting on the FCC doesn't even have a
statutory restriction. It's just that's interesting implied for for for forever.
Speaker 1 (20:17):
The sec also so very very interesting, and you know,
of course it's also potentially relevant for the Federal Reserve
because President Trump obviously has made threats to fire to
your own Powell previously. But you know, I think a
lot of these cases will will bear on whether he
(20:42):
actually takes that step.
Speaker 3 (20:44):
But we'll see.
Speaker 1 (20:44):
I'd like to, you know, I like to tell clients
that I think the courts are going to be much
less of an obstacle to President Trump firing anyone on
the Federal Reserve Board than the markets have been and
will be, So we'll see. The other big news yesterday
was that President Trump posted also on truth Social about
(21:08):
Fanny May and Freddie Mack and this being a good
time to take them public. We were going to have
our colleague Ben Elliott, who covers both those companies, on
the show, but he got called away to do radio
and TV at this hour, so we won't have him.
But I will tell you that he put out a
(21:28):
great note today titled Fanny Freddie release can't be accomplished
by Trump fiat alone. I think the headline conveys that
saying you want to take them public and you want
to release the companies from conservatorship is a lot easier
said than done. There's a lot of moving parts that
need to be ironed out, and it's not clear the
(21:49):
Trump administration has started taking the steps to do that.
One of the issues that needs to be resolved is
that all material litigation involving the companies has to be
resolved before there can be a public offering. I cover
at least two sets of cases involving Fandom Mae and
(22:10):
Freddie Mac and those are if the litigation. If those
lawsuits play out, it's going to take at least another
year for those to be resolved. Then you also have
to figure out what you do with treasuries three hundred
and fifty billion dollars liquidation preference in the enterprises. Do
they just write that down completely or do they get
(22:32):
converted into common stock somehow. Either one of those options
has legal issues involved and could raise potential litigation. You
have to figure out what to do with their capital requirements,
which are pretty onerous at this point, but it would
take a lot of work to lower those requirements. And
then you also have to figure out what to do
with the government simplicit guarantee of GSC mortgage backed securities,
(22:58):
and it's not clear that you know, they've figured out
what to do about that as well, So a lot
of moving parts. You know, if you're a client, if
you're a Bloomberg terminal client and you have questions about it,
feel free to reach out to Ben Elliott, or you
can reach out to me and I'll send you in
the right direction. But having said that, one we bring
in Holly Holly from Holly's been covering all the various
(23:22):
lawsuits challenging the Trump administration's tariffs. There was a here
in last week, there was a here in this week
in the Court of International Trade. Holly, do you want
to come in and give us your thoughts on those cases?
Speaker 3 (23:39):
Sure?
Speaker 5 (23:39):
Yeah, thanks Elliott. So there was a hearing yesterday May
twenty first in a lawsuit that was filed by twelve states,
led by the state of Oregon, and they're seeking to
have the court declare unlawful the reciprocal tariffs and tariffs
that the president has imposed on goods from Canada and Mexico.
(24:02):
And last week the hearing was on private company's lawsuits
challenging reciprocal tariffs, and the Court really didn't revisit the
same ground. They sort of explored different issues at the
different hearings. But I think one of the primary focuses
is whether the court whether number one, does the president
(24:26):
have power under the relevant statute, which is the statue
he's trying to use International Economic Emergency Powers Act to
impose the tariffs, And then if he has that power
and he has to declare an emergency that presents an
unusual and extraordinary threat, does the Court have power to
(24:49):
decide what constitutes an unusual extraordinary threat? Or is that
a political question that can only be decided by the
political branches, Congress and the present So the hearing yesterday
focused a lot on that.
Speaker 1 (25:05):
And where do you think or how do you think
the Court's going to rule eventually?
Speaker 5 (25:10):
I think the Court is eventually going to uphold the terrorists.
But I do think that based on the hearing last week,
which was on May thirteenth, than the hearing yesterday May
twenty first, I think that they're going to say that
this is not a political question that they can decide it.
They can decide what unusual and extraordinary means. Because I
(25:30):
think it's pretty clear that they have problems with the
government's argument that they have to be totally hands off.
So yesterday the government conceded that the court can decide
whether AEPA on the International Economic Emergency Parasact allows the
president to impose terrorists, but they can't. But it didn't concede,
(25:52):
and it contests their ability to decide whether, you know,
the emergencies he side to present an unusual extraorin threat.
And I think the court is having problems with that
because they don't like the idea that the president's power
is basically unlimited if if he if he decides, you know,
there's an emergency and they cannot review whether it's an
(26:14):
unusual extraordinary.
Speaker 1 (26:16):
Yeah, and it's not. The administration got a good ruling
in one of the cases that was filed in Florida
this week, right because the court there agreed with the
administration that the case should be transferred to the Court
of International Trade on the on the idea that AIPA
does allow for tariffs under sort of the regulate imports
(26:40):
language of AEPA.
Speaker 3 (26:41):
Right, that's right.
Speaker 1 (26:43):
But but yeah, but then so if the court says
that it can decide what is unusual and extraordinary, what's
the standard? You know, how's it going to determine what
that standard is?
Speaker 5 (26:59):
Well, I think that's on other issues, so they don't.
They don't really know either, so they've been asking the
parties to tell them how they can decide this issue.
And I think the one the plaintiff in the hearing
on May thirteenth said, you know, look at the legislative history.
It can't be something that's customary and ongoing like the
(27:20):
trade deficit is. And then the government has said, look
at the dictionary definitions of what unusual and extraordinary means.
My thinking is that they are going to try to
somehow define what that means. But I don't think that
they want to cabin the president too much because you know,
(27:45):
if there is an a real emergency, you want the
president to be able to do things like this. So
that's why, you know, one of the arguments that the
government has said is that you don't. That's why Congress
made it so open ended, because they don't want to
define what this means because they don't want to limit
(28:06):
the president in that way if there's an emergency and
this this is used in non when when there's not
a war. But if there's an emergency, whatever that presents,
you want the president to be able to address it.
And that's what they were doing with the statue, and
that's the argument that they're making. So I think that
you know that the Court has to sort of walk
(28:28):
a very fine line if they want to define it,
but also leave open the possibly the power of the
president to use that if, if, if it's necessary.
Speaker 1 (28:42):
Right, And I guess one possible standard is to clears
misconstruction standard from that Maple Leaf case. I guess which
you know, the government wasn't willing to concede that that
any standards shoul apply, but I suppose that could be
a standard that allows the government to prevail and might
not let the government declare an emergency over like a
(29:03):
peanut butter issue, which was one of the hypotheticals to
court raised last week. That's right, all right, great, So
what when do you expect the decision? And are there
other hearings coming up?
Speaker 5 (29:15):
So I expect the decision too, Q. There are other hearings.
So there's a hearing on May twenty seventh that a
case in Washington, d c. On a preliminary injunction motion.
There and then California has filed in Northern in the
federal court in California. They're contesting that the Court of
an International Trade has jurisdiction. So there's a motion to transfer,
(29:37):
but that's going to be heard next week. But they
also filed a preliminary injunction motion and that's supposed to
be heard June second.
Speaker 1 (29:46):
Right, in that case also has standing issues right.
Speaker 5 (29:51):
There, I think that I think I think they don't
have stand in California doesn't have standing, And this came
up yesterday actually in the argument yeah today, because the
court talked about, well, what if we find that the states,
because there's twelve states and only one of the states,
I think it's Oregon imports anything, so you know, that
(30:12):
such that they had to pay something rather than paying
a third party who might increase prices because they import
the product. So in that case, I think an importer
does have standing, but someone who's buying a product from
an importer probably doesn't because it's too indirect. So California
(30:33):
has not said that it imports anything, so I don't
think they have standing, and I think, you know, I
don't know. I would think that they would address that
at the preliminary injunction motion rather than the motion to transfer.
Speaker 1 (30:50):
Oh, that's interesting, and the hearing nice, we can just
on the transfer motion. That's right, very interesting. All right, well,
we'll look forward to your further updates after those hearings.
I think we'll leave it there and wrap up this
episode of Votes and Verdicts. As always, thank you for listening.
If you have any questions about any of the matters
we discussed on this episode, please don't hesitate to reach
(31:12):
out to us at your convenience. As a reminder, you
can find all of our research on the Bloomberg terminal
at big or on our litigation and policy dashboard at
BI laws Go, and we encourage you to listen to
other episodes of Votes and Verdicts on whatever platform you'd
like to get your favorite podcasts. Thank you again for listening,
and have a great day.
Hello, and welcome to the Votes in Verdicts podcast hosted
by the Litigation and Policy team at Bloomberg Intelligence, the
investment research platform of Bloomberg LP on the Bloomberg terminal.
Bloomberg Intelligence has five hundred analysts and strategists working across
the globe and focused on all major markets. Our coverage
includes over two thousand equities and credits, and we have
(00:37):
outlooks on more than ninety industries and one hundred market industries,
currencies and commodities. This podcast series examines the intersection of
business policy and law, and today's are weekly check in
on the litigation and policy catalysts that we're watching and
that we think will impact companies across different sectors and
(00:58):
different industries. My name's Elliott Stein. I'm an analyst with
Bloomberg Intelligence covering litigation in the financial sector. Today is
May twenty second, and since things move quickly, will timestamp this.
It's about two thirty pm Eastern daylight time. I'm delighted
(01:18):
today is always to be joined by a handful of
my colleagues on the Litigation and policy team. Here we
have Nathan Dean and Matt Shettenhelm down in DC and
We also have Holly from who's based up here in
New York with me as a reminder. You can find
all of our research on the Bloomberg terminal at BI go.
And you can find all of our litigation and policy
(01:40):
research as well on our dashboard which is available at
BI laws go. All right, let's jump into the content, Nathan,
Let's bring you in big day yesterday for the Trump
administration getting the one big beautiful bill across the finish
line in the House. At least maybe come in and
(02:01):
tell us sort of what the highlights are and where
it goes from here.
Speaker 2 (02:06):
Yeah, So that it passed the House two hundred and
fifteen to two hundred and fourteen, one person margin. It
actually would have had two. But we discovered that Representative
garbar Reno from Suffolk County fell asleep.
Speaker 3 (02:19):
In the back the vote.
Speaker 1 (02:20):
Hated way that happens.
Speaker 2 (02:22):
Representative there was a representative from Arizona and did no
word where he was, but he was somewhere in the capitol.
Rumor has it that he was also sleeping.
Speaker 1 (02:30):
You know, it's funny, funny. I didn't mention that because
I was wondering when I saw the two fifteenth to
two fourteen vote. The first thing I came to mind,
and this was sort of morbid and I hated to
think about it, was that Congressman Jerry Connolly. I think
you're congressman right in northern from Northern Virginia sadly passed
away what a couple of days ago, And I was
wondering if that made a difference, but if it probably
(02:51):
wouldn't have. If there were two votes on the Republican side,
who probably would have showed up if they had to?
Speaker 2 (02:57):
Yeah, I think somebody probably would have, you know, because
they the speaker has the ability to keep the voter
open as long as he wishes, So I presume somebody
would have sent out a search party for Representative Garbarino
and found him sleep thinking about.
Speaker 1 (03:12):
Welcome him up in the back.
Speaker 2 (03:13):
So from what I heard, the rumor is that they'rerivving
him pretty hard on the Republican side right now. But anyway,
we digress. So, you know, the bill passed two hundred
fifteen to two hundred and fourteen. The amendments that came
in from the House Rules Committee essentially pushed up the
inflation reduction dec tax credits to twenty twenty eight from
twenty thirty one. There were Medicaid work requirements that came
(03:36):
in up until December of twenty twenty six, so it
actually got.
Speaker 3 (03:41):
A little bit more.
Speaker 2 (03:43):
You know, there were a little bit of nuggets for
the House Conservatives after it went through the House Rules Committee,
and then ultimately this is what passed. But for those
of v in the New York and New Jersey area,
your self deduction has gone from ten thousand to forty thousand,
up to an income phase out at five hundred thousand,
and then subsequently phased out at a rate to the
point where if you get if you earn more than
(04:03):
six hundred thousand, you know, there is no more salt
increase other than the ten thousand dollars cap where it
remains today. But you know, we'll say again, this is
a five point five trillion dollar bill. The bulk of
this is on the consumer side for taxes, so no
taxes on tips, no taxes on overtime, social Security, et cetera.
(04:24):
But then in terms of the cuts, it goes Medicaid
snap benefits in the Inflation Production Act. So it passes
the House and now goes to the Senate. Senate is
going to say thank you very much. They're going to
take it. They're going to look at it, and they're
going to throw it over their shoulder. They're going to
ignore it, and they are going essentially going to pick
and choose what they like from this bill and send
it back. Now, if you talk to the Republicans, there
are some of the Republicans out there that's saying that
(04:45):
the salt benefit could be scaled down as a portion
of this I think that's a there's a decent chance
to the Senate Republicans are going to try it. But
I go back to the idea that Senator or sorry,
Representative Mike Lawler will ultimately vote against this bill no
matter what, because those New York Republicans need salt or
else they are going to have a very difficult re
(05:06):
election chance in twenty twenty six. So I am you know,
I may be on a consensus on this one, but
I think the salt sticks to where it is when
it comes to medicated snap benefits. I do think that
the Republicans are going to scale back what the House
Conservatives have pushed.
Speaker 3 (05:20):
You know, work requirements are going to most.
Speaker 2 (05:22):
Likely be remaining in there, but maybe they don't kick
in in December twenty twenty sixth and talking to our
healthcare analyst Dwayne Wright, who's been on this program before.
He was telling me in the pantry earlier today that
it's going to be very difficult to institute a rulemaking
by that date. And so I wouldn't be surprised if
the Senate Republicans say, Okay, we're going to push that
out to twenty twenty eight or even after the election,
(05:45):
you know, the next presidential election.
Speaker 3 (05:46):
Same thing can be said for snap benefits.
Speaker 2 (05:48):
I think the most important thing, though, where we think
that the most ambiguity is on the Inflication Reduction Act
text credits. You know, at a high level, Senator Tom
Tillis in North Carolina and three other Senators have written
letter saying don't touch the IRA. The original House language
was fairly benign, I think, towards these solar tax credits,
and you subsequently saw increases in first solar and phase
(06:12):
and so forth. The House Conservative portion that which was
ultimately adopted by the House scaled a lot of that back,
moved it up forward, and as we speak, the solar
stocks minus first solar are really getting hammered at the moment.
A lot of this is also due to language over
the foreign entity ownership tax credits, meaning that if you're
a foreign entity, you can't take advantage of it.
Speaker 3 (06:33):
So I do think the.
Speaker 2 (06:34):
Senate's going to play around with that language. That's really
important if you're in the solar space. But I could
go on and on for an hour, so I'll think
I'll just leave it there by saying I think it's
going to pass by fourth of July.
Speaker 1 (06:45):
Oh wow in the Senate. Okay, yep, And that's been
the administration's goal, I guess. Anyways, have a nice signing
around July fourth.
Speaker 2 (06:52):
Yeah, I mean we're telling clients ninety percent by end
of year, eighty percent by August recess.
Speaker 1 (06:59):
And one of the big components was that to raise
the dead ceiling, right.
Speaker 2 (07:02):
Yeah, So the House plan raises it by four trillion.
The Senate idea was to raise it by five trillion.
I think it goes to the five trillion route, and
I don't think we have a death ceiling issue.
Speaker 1 (07:11):
Interesting, so you always like to say that this issue
is going to sort of blow up right around the
time you takification in the summer, but it might be good.
Speaker 2 (07:22):
No, Well, you know, I leave for June twenty fourth,
and so if we are going to essay four the
July timeframe, I think I may be logging in from
Europe sometimes.
Speaker 1 (07:32):
Oh that's true, that's true, all right. And then so
the other big thing in DC. I mean, you follow
a lot of big things in DC, but one of
the big things in the last couple of days is
some momentum or a lot of momentum on the stable
coin legislation. But there have also been some last men
and amendments thrown in. I don't know if you want
(07:53):
to talk about those.
Speaker 3 (07:54):
Yeah, so you know, this is the Genius Act.
Speaker 2 (07:56):
This is a stable coin bill that passed the first
initial vote with sixty six to thirty two. It attracted
sixteen Democrats, which is well enough to overcome any potential filbuster.
Speaker 3 (08:07):
So things were looking.
Speaker 2 (08:08):
Okay, and Senator Haggerty, who's the sponsor of the Republican
from Tennessee, was feeling pretty good. And then we had
a situation where Senator Roger Marshall of Kansas has attached
as an amendment the Credit Card Competition Act, which is
his and Senator Dick Durbin's bill that increases competition amongst
(08:28):
the credit Card networks for Visa MasterCard. The idea here
is is that if you're a bank, you have to
offer your retail merchants Visa and another company, MasterCard and
another company. And it can't be Visa and MasterCard the
way it's written, So essentially it's discover now Capital one,
an American Express, or the two other entities that could
potentially benefit from this, plus some other smaller competitors out there.
(08:49):
The problem with this is that you've now pitted the
banks versus the retailers and the airlines. The airlines are
involved because they are saying their credit card reward programs
and if anybody's flown through a LaGuardia or Reagan or
I saw this in Dallas about a month ago, big
adverts saying please don't touch our credit card airline programs.
So now you have a situation where banks versus retailers
(09:10):
versus airlines, and the dynamics of those supporters don't aren't
the dynamics of the sixty six thirty two vote. So
you may have a Democratic Senator who is voting in
favor of stable coins, but at the same time as
a huge proponent of the retail of the airlines or
the bank, and all of a sudden, now the vote
(09:33):
count just completely goes awry. At the same time, Senator
Josh Holly and Missouri said, well, if Senator Marshall's doing this,
I'm doing this as well. And he's made plans to
attach his bill that would cap credit card interest rates
at ten percent that he's teamed up with Bernie Sanders
on which President Trump has also campaigned on.
Speaker 3 (09:50):
So now it's gotten into a big mess.
Speaker 2 (09:52):
So I think what happens here is is that Senator
Hagey and he goes to everybody and says, look, folks,
this is just blown up into something way too big.
Let's just strip all the amendments, let's get rid of
this stuff, and let's just pass the bill.
Speaker 3 (10:04):
I think that happens next week.
Speaker 2 (10:05):
And so that's why in my notes that I put
out this morning, I think that while this visa MasterCard
bill is certainly a risk that's going to heat up
later this year, I just think the timing right now
is not going to happen. And I don't think Senator
Holly's bill of ten percent, well, you know, I don't
think that's going to be much of a factor.
Speaker 1 (10:20):
At all so they can vote on the amendments separately,
or Hagardy just forces these guys to sort of withdraw
the amendments.
Speaker 2 (10:27):
I think the latter is more likely than a vote,
because if you have a vote specifically in the amendment,
then it's going to be kind of awkward because I
may be in favor of this amendment, but I may
not be in favor of the stable coin bills.
Speaker 3 (10:38):
So it just gets really messy.
Speaker 2 (10:40):
And so I think members of both parties are kind
of hoping that Senator Haggarty works out a special deal,
or you know, Senator Thune works out a deal with
Senator Marshall says I'll give you a vote later this year.
Speaker 3 (10:52):
Let's just not do it right now as part of
the Genius Act, got it.
Speaker 2 (10:55):
The last thing is the Broader Crypto Market Structure Bill.
We're hearing House Financial Service Committee markup on June tenth.
Speaker 1 (11:03):
Oh interesting, okay, And obviously bitcoin is doing really well lately.
Presumably all these developments, uh are part of that. Okay, Nathan,
thanks Matt, let's bring you in. I know there was
some stuff you cover that was also in the One
(11:24):
Big Beautiful Bill related to spectrum auctions. And President Trump
uh posted on truth Social about it, I think a
couple of nights ago. You want to tell us what
what what that's all about?
Speaker 3 (11:35):
Yeah, that's right. Yeah.
Speaker 4 (11:36):
So this this is a this is a big deal
for for AT and T, T Mobile and Verizon. So
the you know, their their wireless business runs on federal
spectrum that they obtained through FCC auctions. But the problem
has been that the f c C can only hold
auctions if Congress empowers it to do that, and the
(12:00):
FCC's auction authority expired in March of twenty twenty three,
and since then, Congress has not been able to agree
on renewing that authority. This is the first time where
we're actually seeing some substantial progress on that. The House
build that passed includes a provision that says not later
(12:24):
than three years from passage of this act, the FCC
should auction two hundred megahertz of spectrum. Also, it says
that over the next couple of years, the FCC and
the Commerce Department should work to find spectrum that the
military is using, the federal government is using, and try
(12:45):
to take that back so that it can be auctioned
for private uses.
Speaker 3 (12:49):
And so.
Speaker 4 (12:51):
This has been the big problem is that the military
and the federal government is very cautious about giving up
its spectrum.
Speaker 3 (13:00):
And so.
Speaker 4 (13:02):
The fact that this has been able to get through
the House, that President Trump is advocating for it, I
think vodes really well that in some form, you know,
there's still work to be done in the Senate, but
I think in some form this is likely to become
law this year and that FCC auction the FCC is
likely to be back in business when it comes to
(13:23):
auctioning spectrum.
Speaker 1 (13:24):
And is this a partisan issue? I'm just trying to
understand where the where the divide is if it is.
Speaker 4 (13:31):
It really isn't you If you ask Democrats and Republicans,
they they would say, look, more spectrum is a good thing.
It's often you know, it often splits Republicans actually, because
some of them have been very sensitive about protecting military
uses of this spectrum. And on the other hand, you
have some that are very supportive of the market side
(13:55):
and how important wireless is to do everything. And so
you you've had some some some interesting splits, you know,
most often within the Republican party itself, but Democrats as well.
So it doesn't really break down directly on party. Ted
Cruz in the Senate has actually been pushing for even
(14:17):
more spectrum to be given up by the federal government.
But then there are other senators that are on the
opposite side of that, even Republican senators that say, no, no,
let's be careful here, let's let's not disrupt the federal
government and the military uses. So it's been a really
difficult issue. I think you're finally seeing progress. The House
bill doesn't go as far as Ted Cruz wanted it
(14:40):
too in grabbing that spectrum and auctioning it, and so
it might be the sort of compromise that that works
ultimately something along those lines. And I think you can't
understate how important it is to have President Trump advocating
for it. So that makes me think it happens in
some form this year.
Speaker 1 (14:58):
Super interesting.
Speaker 3 (15:00):
All Right.
Speaker 1 (15:00):
The other thing that happened in your space, I think
this just happened today where an FCC commissioner said that
you'll no longer be at the FCC when it holds
its meeting in June. What what's that about and what's
the impact?
Speaker 3 (15:16):
Yeah?
Speaker 4 (15:16):
So, so Jeffrey Starks is one of the Democrats at
the FCC. The FCC has been divided to Republicans to
two Democrats. That means Brendan Carr, the chairman, can't do
any of the controversial stuff that that that that that
splits the parties. With Jeffree Starks stepping down, all of
a sudden, it's two to one. The quorum requirement is
(15:39):
just three at the FCC, So they're good to go
now on you know, anything on President Trump's agenda, Brendan
Carr's agenda, it can start right now. Where I think
it matters for companies most importantly is broadcasters. TV and
radio broadcasters have been hamstrung by FCC caps on how
(15:59):
many they can own, how many TV stations, how many
radio stations they can own across the country. I think
the FCC will start pretty quickly, if not at its
June meeting shortly thereafter, on a rule making or multiple
rule makings to ease those limits. And I think that
that creates huge opportunities for a company like Nextstar, for
(16:22):
Sinclair Tegna to do deals to acquire more stations and
grow larger in a way that these FCC rules have
prevented for decades. And so look for that all to
get supercharged now that the Republicans haven't advantaged one other thing,
one other potential impact, not just broadcasters, internet companies. Brendan
(16:45):
Carr has said, look, we're going to go after big
tech companies with the Section two thirty liability shield. This
key liability shield that protects them from getting sued every
time something as someone posts something on the Internet that
causes harm in the real world. You can't sue your
social media company because of that under Section two thirty.
Running cars looking at ways to narrow that liability shield.
(17:09):
He's concerned about censorship from those companies and wants to
go after them to change their practices. And so now
with a two to one advantage, he can do that.
And so he could start a rulemaking on that or
some other other proceeding to take aim at Section two thirty,
which could be really problematic depending on how he targets
(17:30):
it for those companies.
Speaker 1 (17:32):
And how many commissioners does the SEC need in order
to vote on rules.
Speaker 4 (17:36):
It only needs three to function. Typically you have five,
and I think the law says something about it's supposed
to be you know, he can't put five Republicans on there.
He needs to even it out a little bit. I'm
not sure though, that he's going to put any Democrats
up there. There's nothing that actually requires him to nominate anymore,
as long as he has three to function, which he
(17:56):
does now he's at two to one. He's also nominated
another Republican, Olivia Truck. She's very close to clearing the Senate.
So he's pretty soon going to have three to one advantage.
And if we if we see what Trump's done with
other agencies like the FTC that that loan Democrat Ana Gomez,
she may not be long for the FCC. We've seen
(18:19):
Trump fire the Democrats at other agencies. Once olivia trustee
is approved, Trump will have three Republicans there. I don't
know that he needs to keep a fourth from the
other party. And so we might be moving into a
new world of just Republican you know, Republican control of
these agencies.
Speaker 1 (18:37):
Yeah, And so that's a great segue because just this
week there was a hearing on in the lawsuit by
the two FTC commissioners who were fired, challenging their termination.
And you know, this has happened across a number of
agencies where President Trump has fired the commissioners. Even though
(18:58):
the government statute have four cause removal restrictions. The President's
position is that those are unconstitutional because they impinge on
his executive authority. So that's a legal issue that's playing
out across multiple agencies. You know, we've started to see
some rulings, particularly in the NRB and Merit Systems Protection
(19:19):
Board cases, and you know, the ruins basically follow along
ideological lines, where you have judges appointed by Democrats saying
the four cause removal restriction is constitutional, and judges appointed
by Republicans saying it's unconstitutional and President Trump should be
(19:40):
allowed to fire these commissioners. We haven't gotten really a
definitive ruin from the Supreme Court on any of these
cases yet, but that's where it's headed, and you know,
just the way things are headed. I expect them eventually
to narrow the holding of Humphrey's Executor, which was the
nineteen thirty five Supreme Court case that upheld for cause
(20:00):
removal restrictions. But I think that's that's already been narrowed
recently in other Supreme Court cases, and I expect it
to be narrowed more clearly.
Speaker 4 (20:09):
And the interesting on the FCC doesn't even have a
statutory restriction. It's just that's interesting implied for for for forever.
Speaker 1 (20:17):
The sec also so very very interesting, and you know,
of course it's also potentially relevant for the Federal Reserve
because President Trump obviously has made threats to fire to
your own Powell previously. But you know, I think a
lot of these cases will will bear on whether he
(20:42):
actually takes that step.
Speaker 3 (20:44):
But we'll see.
Speaker 1 (20:44):
I'd like to, you know, I like to tell clients
that I think the courts are going to be much
less of an obstacle to President Trump firing anyone on
the Federal Reserve Board than the markets have been and
will be, So we'll see. The other big news yesterday
was that President Trump posted also on truth Social about
(21:08):
Fanny May and Freddie Mack and this being a good
time to take them public. We were going to have
our colleague Ben Elliott, who covers both those companies, on
the show, but he got called away to do radio
and TV at this hour, so we won't have him.
But I will tell you that he put out a
(21:28):
great note today titled Fanny Freddie release can't be accomplished
by Trump fiat alone. I think the headline conveys that
saying you want to take them public and you want
to release the companies from conservatorship is a lot easier
said than done. There's a lot of moving parts that
need to be ironed out, and it's not clear the
(21:49):
Trump administration has started taking the steps to do that.
One of the issues that needs to be resolved is
that all material litigation involving the companies has to be
resolved before there can be a public offering. I cover
at least two sets of cases involving Fandom Mae and
(22:10):
Freddie Mac and those are if the litigation. If those
lawsuits play out, it's going to take at least another
year for those to be resolved. Then you also have
to figure out what you do with treasuries three hundred
and fifty billion dollars liquidation preference in the enterprises. Do
they just write that down completely or do they get
(22:32):
converted into common stock somehow. Either one of those options
has legal issues involved and could raise potential litigation. You
have to figure out what to do with their capital requirements,
which are pretty onerous at this point, but it would
take a lot of work to lower those requirements. And
then you also have to figure out what to do
with the government simplicit guarantee of GSC mortgage backed securities,
(22:58):
and it's not clear that you know, they've figured out
what to do about that as well, So a lot
of moving parts. You know, if you're a client, if
you're a Bloomberg terminal client and you have questions about it,
feel free to reach out to Ben Elliott, or you
can reach out to me and I'll send you in
the right direction. But having said that, one we bring
in Holly Holly from Holly's been covering all the various
(23:22):
lawsuits challenging the Trump administration's tariffs. There was a here
in last week, there was a here in this week
in the Court of International Trade. Holly, do you want
to come in and give us your thoughts on those cases?
Speaker 3 (23:39):
Sure?
Speaker 5 (23:39):
Yeah, thanks Elliott. So there was a hearing yesterday May
twenty first in a lawsuit that was filed by twelve states,
led by the state of Oregon, and they're seeking to
have the court declare unlawful the reciprocal tariffs and tariffs
that the president has imposed on goods from Canada and Mexico.
(24:02):
And last week the hearing was on private company's lawsuits
challenging reciprocal tariffs, and the Court really didn't revisit the
same ground. They sort of explored different issues at the
different hearings. But I think one of the primary focuses
is whether the court whether number one, does the president
(24:26):
have power under the relevant statute, which is the statue
he's trying to use International Economic Emergency Powers Act to
impose the tariffs, And then if he has that power
and he has to declare an emergency that presents an
unusual and extraordinary threat, does the Court have power to
(24:49):
decide what constitutes an unusual extraordinary threat? Or is that
a political question that can only be decided by the
political branches, Congress and the present So the hearing yesterday
focused a lot on that.
Speaker 1 (25:05):
And where do you think or how do you think
the Court's going to rule eventually?
Speaker 5 (25:10):
I think the Court is eventually going to uphold the terrorists.
But I do think that based on the hearing last week,
which was on May thirteenth, than the hearing yesterday May
twenty first, I think that they're going to say that
this is not a political question that they can decide it.
They can decide what unusual and extraordinary means. Because I
(25:30):
think it's pretty clear that they have problems with the
government's argument that they have to be totally hands off.
So yesterday the government conceded that the court can decide
whether AEPA on the International Economic Emergency Parasact allows the
president to impose terrorists, but they can't. But it didn't concede,
(25:52):
and it contests their ability to decide whether, you know,
the emergencies he side to present an unusual extraorin threat.
And I think the court is having problems with that
because they don't like the idea that the president's power
is basically unlimited if if he if he decides, you know,
there's an emergency and they cannot review whether it's an
(26:14):
unusual extraordinary.
Speaker 1 (26:16):
Yeah, and it's not. The administration got a good ruling
in one of the cases that was filed in Florida
this week, right because the court there agreed with the
administration that the case should be transferred to the Court
of International Trade on the on the idea that AIPA
does allow for tariffs under sort of the regulate imports
(26:40):
language of AEPA.
Speaker 3 (26:41):
Right, that's right.
Speaker 1 (26:43):
But but yeah, but then so if the court says
that it can decide what is unusual and extraordinary, what's
the standard? You know, how's it going to determine what
that standard is?
Speaker 5 (26:59):
Well, I think that's on other issues, so they don't.
They don't really know either, so they've been asking the
parties to tell them how they can decide this issue.
And I think the one the plaintiff in the hearing
on May thirteenth said, you know, look at the legislative history.
It can't be something that's customary and ongoing like the
(27:20):
trade deficit is. And then the government has said, look
at the dictionary definitions of what unusual and extraordinary means.
My thinking is that they are going to try to
somehow define what that means. But I don't think that
they want to cabin the president too much because you know,
(27:45):
if there is an a real emergency, you want the
president to be able to do things like this. So
that's why, you know, one of the arguments that the
government has said is that you don't. That's why Congress
made it so open ended, because they don't want to
define what this means because they don't want to limit
(28:06):
the president in that way if there's an emergency and
this this is used in non when when there's not
a war. But if there's an emergency, whatever that presents,
you want the president to be able to address it.
And that's what they were doing with the statue, and
that's the argument that they're making. So I think that
you know that the Court has to sort of walk
(28:28):
a very fine line if they want to define it,
but also leave open the possibly the power of the
president to use that if, if, if it's necessary.
Speaker 1 (28:42):
Right, And I guess one possible standard is to clears
misconstruction standard from that Maple Leaf case. I guess which
you know, the government wasn't willing to concede that that
any standards shoul apply, but I suppose that could be
a standard that allows the government to prevail and might
not let the government declare an emergency over like a
(29:03):
peanut butter issue, which was one of the hypotheticals to
court raised last week. That's right, all right, great, So
what when do you expect the decision? And are there
other hearings coming up?
Speaker 5 (29:15):
So I expect the decision too, Q. There are other hearings.
So there's a hearing on May twenty seventh that a
case in Washington, d c. On a preliminary injunction motion.
There and then California has filed in Northern in the
federal court in California. They're contesting that the Court of
an International Trade has jurisdiction. So there's a motion to transfer,
(29:37):
but that's going to be heard next week. But they
also filed a preliminary injunction motion and that's supposed to
be heard June second.
Speaker 1 (29:46):
Right, in that case also has standing issues right.
Speaker 5 (29:51):
There, I think that I think I think they don't
have stand in California doesn't have standing, And this came
up yesterday actually in the argument yeah today, because the
court talked about, well, what if we find that the states,
because there's twelve states and only one of the states,
I think it's Oregon imports anything, so you know, that
(30:12):
such that they had to pay something rather than paying
a third party who might increase prices because they import
the product. So in that case, I think an importer
does have standing, but someone who's buying a product from
an importer probably doesn't because it's too indirect. So California
(30:33):
has not said that it imports anything, so I don't
think they have standing, and I think, you know, I
don't know. I would think that they would address that
at the preliminary injunction motion rather than the motion to transfer.
Speaker 1 (30:50):
Oh, that's interesting, and the hearing nice, we can just
on the transfer motion. That's right, very interesting. All right, well,
we'll look forward to your further updates after those hearings.
I think we'll leave it there and wrap up this
episode of Votes and Verdicts. As always, thank you for listening.
If you have any questions about any of the matters
we discussed on this episode, please don't hesitate to reach
(31:12):
out to us at your convenience. As a reminder, you
can find all of our research on the Bloomberg terminal
at big or on our litigation and policy dashboard at
BI laws Go, and we encourage you to listen to
other episodes of Votes and Verdicts on whatever platform you'd
like to get your favorite podcasts. Thank you again for listening,
and have a great day.
Host
Elliott Stein
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