May 2, 2025 • 50 mins
Watch Joe and Kailey LIVE every day on YouTube: http://bit.ly/3vTiACF.
US job growth was robust in April and the unemployment rate held steady, suggesting uncertainty over President Donald Trump’s trade policy has yet to have a material impact on hiring plans.
Nonfarm payrolls increased 177,000 last month after the prior two months’ advances were revised lower, according to Bureau of Labor Statistics data out Friday. The unemployment rate was unchanged at 4.2%.
The report suggests the labor market continues to cool gradually, a sign that businesses facing heightened uncertainty around tariffs and turmoil in financial markets didn’t significantly alter their hiring plans. Most economists anticipate the brunt of the impact from punishing levies will be seen in coming months.
Bloomberg Washington Correspondents Joe Mathieu and Kailey Leinz deliver insight and analysis on the latest headlines from the White House and Capitol Hill, including conversations with influential lawmakers and key figures in politics and policy. On this edition, Joe and Kailey speak with:
- Bloomberg Economics Chief US Economist Anna Wong.
- Economic Policy Consultant Kathryn Edwards.
- Former OMB Director and former Acting White House Chief of Staff Mick Mulvaney.
- Democratic Congresswoman Mikie Sherrill of New Jersey, candidate for Governor of New Jersey.
- Democratic Michigan State Senator Mallory McMorrow, candidate for US Senate.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
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(00:20):
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Speaker 2 (00:25):
The Jobs Friday addition and a Job's Friday market that
we are all experiencing is Charlie was just running us
through because it was indeed a hot payrolls print we
got today actually one that our economists here at Bloomberg
Economics might have predicted. They thought this was going to
come in higher than the consensus call. And indeed, one
hundred and seventy seven thousand job editions in the month
of March is what we got. Something the White House
(00:47):
is touting. Stephen Meyer, and who chairs the Council of
Economic Advisors over there, joined Bloomberg earlier today.
Speaker 3 (00:54):
There's been an ongoing disconnect between the hard data and
the soft data, and the hard data continue to perform
very well. Hundred and seventy seven thousand jobs last month,
a beat of forty thousand jobs. That's the President's second
jobs they beat in a row. And on top of that,
you've got eleven thousand construction jobs, you know, expanding and
expanding construction construction sector in spite of the President's cut
crack down on the border.
Speaker 4 (01:15):
So there you have it. Non farm payrolls increasing by
one hundred and seventy seven thousand last month, and nobody
came closer than Anna Wong, who joins us right now
Bloomberg Economics chief US economist, and it's great to see you.
The headlines all seem to read the same, hotter than
expected despite uncertainty over tariffs. Is that how you see it?
Speaker 5 (01:35):
Yeah, So we basically predicted this right, but I also
said in our preview that this would be the last
solid print before we're about to have very too, very
weak print. And even this solid print surprised me in
some with some details on how weak certain things are.
So i'll tell you, Joe. The thing that surprised me
(01:57):
was that the gains in professional and businesses sector, which
is what we expected, actually largely came from employment services.
So basically, employment services are the people who are helping
temp agencies, helping filled helping people who are jobless to
get temp jobs. So essentially, the support to payrolls print
(02:19):
today is due to an increase in demand of jobs
of helping jobless people.
Speaker 2 (02:26):
Okay, well, that is definitely important to consider as we
look at the kind of breakdown here. There's also the
fact that manufacturing was not seeing job expansion. Instead, those
jobs went down by about one thousand last month. What
is that signal, Anna, Because we've talked about how it's
manufacturers that actually felt the effects of these tariffs largely.
Speaker 5 (02:44):
First, yes, and so any economic models would predict that
the indicated decaters that would be showing the earliest evidence
of the impact of tariff would be ism manufacturing, and
we did see it today. I mean this week that
in the survey kits that firms are resorting to layoffs now.
So that's why we have seen a negative change in
(03:08):
payrolls today for manufacturing sectors. In the coming to payrolls report,
we are expecting a significant slow down in logistics and
trade sector. And usually basically in May and in June
and July, you're supposed to see bustling of activity in
the ports because firms are very busy getting the shipments
(03:29):
off the boats, transporting those goods that are about to
stock up the shelf and home deepot for ahead of
Halloween for you know, and target for go to getting
back to school. All those are supposed to be arriving
on the ports in May and June, and we are
not going to see that because of the disruption. We're
already seeing there are only you know, thirty five ships
(03:51):
leaving China for US as of two days ago. Nothing
could change that. Even if there's a one hundred percent
pivot in today, we are still not going to see
the goods in the ports in the first two weeks
of May.
Speaker 4 (04:07):
Fascinating. We heard from Elon Musk this week talking about
the efforts of the DOGE or the accomplishments of the DOGE.
Of course, the original intention was to find two trillion
dollars in cuts. They got to one hundred and sixty billion.
He said, also put a number on job cuts one
percent of the federal workforce, twenty thousand people. Does a
number like that have an impact in the jobs data
(04:29):
or is that much smaller than some people expected and
it's a blip on the radar.
Speaker 5 (04:33):
Yeah, So one hundred and fifty billion, if we take
that number at face value, is basically where our baseline was.
You know even I remember Scott Bessen two months ago
when he did an interview with Bloomberg here with Saleja,
our reporter Saleja, he said that it would be already
(04:54):
you know, a cherry and a cake to have two
hundred billion cuts. So that is something. And also in
terms of the reduction and federal workforce that Joe, remember
that the key piece is actually the hiring free. Every year,
about one hundred twenty two hundred and fifty thousand federal
workers self retire or just naturally go through attrition, and
(05:19):
so by not refilling that that replacing those jobs, you're
actually slowly downsizing the federal government workforce. And by twenty
twenty eight, at the end of this Trump administration, the
federal workforce would be maybe at least six to ten
percent smaller than when it begins.
Speaker 2 (05:38):
Well, of course, we have a long way to go
until we get to twenty twenty eight. Just judging by
how twenty twenty five has gone so far, probably it's
going to feel like a lot more than just four years.
And finally, on the data today, when we consider that
we actually had cooler wage growth than expected. Knowing we've
had this ongoing conversation about, Oh, what's going to happen
if the FED is faced with both inflationary and growth
risk at the same time, what do they do? Does
(06:00):
that actually suggest that some of those inflationary pressures you
might be worried about are not present at least right now.
Speaker 6 (06:07):
Yeah.
Speaker 5 (06:07):
So keep in mind that our team has been saying
that the core PCEE inflation would not be as high
as what the consensus is saying and what the FED
is projecting, because precisely for that reason, Kayley, we think
that the service sector, which is more important for the
US economy it accounts for about seventy percent of CBI basket,
(06:30):
that part of the economy is going to soften, and
as a result, that disinflationary pressure from the services will
offset some of the goods price inflation that we might
be seeing. So on net, we just don't think that
the tariff shock will ultimately lead to a three point
five to four point zero core pc inflation that internal
(06:50):
FED forecast might be showing.
Speaker 2 (06:53):
All right, of course we'll be hearing from the FED
on Wednesday. Wonder how that data will factor into the
fact that they're very likely to not do anything with
rates next week, and along of Bloomberg Economics joining us
on this Jobs Today. Thank you so much, and we
want to continue the conversation now as we turn to
Catherine Edwards, who's an economic policy consultant and a contributor
to Bloomberg Opinion here with us on Bloomberg TV and Radio.
Speaker 6 (07:13):
Catherine, welcome back.
Speaker 2 (07:14):
I wonder you're reading of the jobs report today, knowing
we've been talking to you for months now about concern
you have around what could be a deterioration in the
labor market. Doesn't look like we're seeing that much evidence
of it yet.
Speaker 7 (07:28):
No, I would call this a muted, if not boring
jobs report. I mean, we're we're all looking through it
with a fine tooth comb, but there's really not that
much there. And I think it's expected given the timing
of the bigger tariff announcements. The data is collected just
in the second week of the month, so it would
have been pretty radical for the tariffs to have affected
the labor markets so quickly and so intangibly. The way
(07:51):
that the mechanisms of a tariff affecting the labor market
now are pretty well understood, but they don't happen as
fast as a week and a half from an announcement.
Speaker 4 (08:02):
So what's your trajectory then for the job market. We
just got a GDP showing contraction in the first quarter.
We're seeing recession odds go up. Some suggest we're in
a recession already once we work through the next couple
of months. The impact of tariff uncertainty, the federal worker
layoffs that we were just discussing, with a broader slowdown
(08:24):
economically means what for this job market.
Speaker 7 (08:28):
You know, I went through the beij book that was
reported in April to hear what the Federal Reserve regional
branches are hearing from employers in their districts, and you'll
see kind of throughout the reports not starting layoffs, but
making preparation for reductions in headcount. Right, they have not
felt the need to cut their jobs, but they are
(08:49):
preparing for a headcount reduction. And this definitely dovetails with
what we are seeing in consumer sentiment. Now. It's very
easy for people to kind of dismiss consumer sentiment of
like this is just the history of people, it's driven
by politics, But there's really good economic research behind the
tangible aspect of consumer sentiment. Is people who have information
(09:09):
that has not manifested in the economy yet. So this
would be something like your boss tells you your job's
going to end in June. You still have a job,
but you know something bad is coming. Or they tell
you if look, if more ships don't leave China and
these ports aren't busy, all of you are furloughed by
may or by mend of May. Right, there is a
sense in which consumer sentiment reflects information that people have
(09:31):
about where the economy is going, and this is why
it can tank kind of leading up to and is
considered a leading recession indicator. I think that those two
things combined, you know, they're worrisome. And we still haven't
seen an uptick in hiring. We still haven't seen employers
really expanding payrolls to a great degree. And one thing
that Anna didn't mention is that about a third of
(09:52):
job growth entirely this year comes from the health sector,
which is not a reflection of economic activity. That's rather.
Speaker 2 (10:03):
Sure when you were referring to the idea that ships
aren't necessarily going to be coming in from China. We
heard from President Trump when he was at the meeting
of his cabinet earlier this week, talking about dolls, that
maybe children will only have two dolls instead of thirty,
and maybe those dolls will cost.
Speaker 6 (10:19):
A few dollars more.
Speaker 2 (10:20):
And I wonder if you see that as recognition of
an economic reality on the part of President Trump that
to this point he has seemed reluctant to adopt or acknowledge.
Speaker 7 (10:31):
I mean, I think that this is another flip flop
from someone who changes his mind all the time. I
mean this, remember that we had in January and February
kind of dismissive concerns that economic pain was necessary, and
then we had following in March in April that the
FED just needs to cooperate with him. And so now
it's we're not going to have pain, but we will
have fewer dolls. I mean, I think it's just a
lack of consistency that we've seen top to bottom with
(10:54):
these tariffs. I mean, think about what was put on
a placard in the rose garden that didn't apply with
even in two weeks, or how deliberate were the numbers
that went up on a placard in a rose garden
that the Internet toured apart really an under an hour
that it wasn't really reflective of actual economic realities or
the relationships we have in terms of trade with other countries.
So I think there is a part of economic uncertainty
(11:17):
that is hard to place that comes from a distrust
of leadership. So we can negotiate trade agreements, we can
get things back on board. But you know, I don't
know how many businesses think that there is going to
be consistent economic policy or messaging coming from the White House.
Speaker 4 (11:34):
Did Donald Trump just recognize reality though? Catherine? What will
this mean when it comes to back to school shopping?
This is going to be a massive story late summer
going into fall, and then there's going to be the
story about Christmas being canceled?
Speaker 5 (11:48):
Right?
Speaker 4 (11:49):
Is there any way to turn this around?
Speaker 7 (11:51):
You know, of course, like you should never give up
on the US economy and you should never give up
on good policy being able to make a difference. I
think that many people are scared. And I know that
the stock market is on a winning streak and that's great,
But the terror that is inflicted on savers when they
see their four oh one K take a nose dive
that doesn't bounce back as much as the SMP does
within a couple of weeks, there is a real fear
(12:13):
and vulnerability that goes into consumer thinking. And if you
hear from your boss we might have to do layoffs
in the summer, and you look at your four oh
one K balance at the wrong week in April and
you get scared about the future. You're not going to
spend money the same way. It's possible to turn mood
and sentiment around, but telling people fewer dolls is in
their future is probably not the way to do it.
Speaker 8 (12:36):
Well.
Speaker 2 (12:36):
And if we consider what the implication of a slowdown
in consumption would be, knowing that consumers are the engine
of the US economy, Catherine, that's where all of this
kind of recessionary talk comes in. Even the President has
said he thinks that there could be an economic slowdown
if the FED does not cut rates in time. A
repeated suggestion that the FED risks being too late here,
(12:56):
as they have in the President's mind been in the past.
And I wonder if you actually think there is some
truth to that notion that the FED is likely to
be late to react, just by the function of monetary
policy in the lag with which it works.
Speaker 7 (13:10):
The FED, you know, doesn't serve one master, but the
US economy and they've got to act within the stewardship
of the US economy providing stability and certainty going forward.
And you know, if the President says johnthan Powell says
how high, that is even worse case scenario than a recession,
and that's a permanent hit to our economy and stability.
So we have to trust the Fed to put all
(13:31):
of the data on the table and have a broad
based decision making that isn't just about you know, intervening
during a time of uncertainty. And you know, frankly, like
what the US economy needs is stability uncertainty. And so
I think that this is what has made the tariff
rollout so doubly dangerous because as you mentioned, Kaylee, you know,
there is a certain degree to which recessions become self fulfilling.
(13:53):
That as people get more scared, they pull back on spending.
That declines economic activity because they're the engine of economic growth,
and that accelerates a decline, you know, as we're rolling
down the hill. So I, you know, I think Powell
being stayed here is really the antidote for a lot
of people's fears, you know, to the extent that they
pay attention as much as understanding the federal in the economy,
(14:15):
which which could be a leap for a lot of people.
But I think, as you know, people like us who
are in deep on following what is going on in
the details of the economy, it is nice to see
Powell putting data in the economy first.
Speaker 4 (14:28):
That's great to have you back, Catherine, economic policy consultant,
Bloomberg opinion contributor Edwards with her view on the economy.
Just days away from the next FED meeting. He's got
his work cut out for him next week, Kaylee, J.
Powell is going to face questions about tariffs and Trump.
And you wonder if he brings any nuances that we
haven't heard yet to this conversation.
Speaker 2 (14:48):
Yeah, of course, we've already heard repeatedly from him. The
FED operates independently, that independence is protected by law. They
feel that they have the flexibility here to wait and see.
There's too much policy uncertainty. He's probably not going to
signal hey, I'm thinking about cutting rates anytimes.
Speaker 4 (15:05):
You don't even need to watch it now, Yes, listen
to Kaylee. Mick Mulvaney's on the way in. Yeah, we
have been talk to making some time. He'll join us
next with the view from the Republican Party, our Trump
whisperer on the way in here. As Donald Trump spends
the weekend at mar Alago, we'll have much more straight
ahead on Bloomberg.
Speaker 1 (15:23):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm. He's durn
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You can also listen live on Amazon Alexa from our
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thirty with.
Speaker 6 (15:43):
A look at the Friday trade.
Speaker 2 (15:44):
What could be the best rally or closing the best
nine day rally we've seen on the S and P
five hundred, the first time we've seen a nine day
rally like that going.
Speaker 6 (15:52):
Back to two thousand and four.
Speaker 2 (15:54):
As we could consider jobs and trade, and I wonder
there's a question as to whether or not the market
is also discounting the focus now being on tax cuts
that could be coming down the line as Congress is
still working on its budget reconciliation package. Though of course
they're not in town today, it's Friday, way would they be.
They're going to come back next week though, and the
House particularly is going to keep working though It's interesting
(16:16):
they actually have decided to punt on the markups and
some key committees of their pieces of legislation. The Energy
and Commerce Committee, which is still dealing with a massive
question around medicaid, the Ways and Means Committee, which actually
has to be the architect of this tax package. What's
going to be included, potentially a lifting of the salt cap.
(16:38):
Are they going to really not tax overtime tips or
Social Security and all of those various components. So there
still is a lot of work to do. But President
Trump Alice yesterday in the White House Rose Garden was
sounding optimistic because he still wants to see this one
big package come to fruition.
Speaker 8 (16:54):
The progress of the one big beautiful bill. We love
that bill. I won't like it if it doesn't pass,
neither will you doesn't pass. Your taxes are going to
go up sixty eight percent. These will be the biggest
tax cuts in American history, with one hundred percent expensing,
which is something that people cannot believe they getting. We
(17:14):
did it in the last one and we had the
most successful economy in my first four years. That we've
ever had the history of our country.
Speaker 4 (17:22):
Which brings us to our conversation with Mick Mulvaney, the
former acting White House Chief of Staff, former Republican congressman
who helped found the Freedom Caucus, and a former OMB
director is with us now. It's been a long time, Mick,
welcome back. Great to see you. You're no stranger to
this process or the President of the United States. And
so I want to pick up on what Kaylee mentioned,
(17:44):
the delayed markups for energy and commerce, ways and means agriculture.
At some point they're going to have to get to this.
And the matter of Medicaid has people in a bind.
The President says there will be no cuts. Speaker says,
we're not going to do it. There are members of
your former Freedom Caucus who want to see dramatic cuts.
(18:05):
But if we hold the line on this and make
good on what Donald Trump is saying there will be
no cuts to Medicare or Medicaid, where do you find
the money.
Speaker 9 (18:14):
Hello, what happy Friday. Nice to see you guys working
on a Friday. Kaylee, You're getting a little bit cynical
about Washington d C. So look, they keep in mind that,
and I had this conversation with the There's a lot
of questions that wrapp up. Let me take the last
one about Medicare and Medicaid. When Donald Trump says there's
been no cuts to Medicare and Medicaid. I've had that
(18:35):
conversation personally Donald Trump a dozen times. And when he said,
Mickey can't cut Medicare in our twenty eighteen budget, for example,
soa mster president, what is Medicare to you? So well,
Medicare is what people get when they turn to the
healthcare they get when they're sixty five. I said, you know,
you're absolutely right, and I'm not going to touch that.
Can I please have your permission to go and look
at reducing spending or reforming everything else that's cump falls
(18:57):
under Medicare that people don't know about, most people don't
care about. He said, what do you mean? I said,
I ran down the fifteen different programs that are funded
out of this giant pot of money that medicare. He said,
that's not Medicare. So mister President, technically it is. He
goes good fix that. Our budget in twenty eighteen was
the largest entitlement reform proposal in history, but did not
touch these over sixty five health care benefits and did
(19:19):
not touch old age income supplements for Social Security, but
it still cut Social Security reform, medicare, those types of things.
So you have to watch the language. The bottom line, though,
to your point show is great.
Speaker 4 (19:30):
It's hard.
Speaker 9 (19:30):
It's really really hard. When we did that in the
budget twenty eighteen, the people who hated it the most
were Republicans in the Senate, and that hasn't changed. It's really, really,
really hard to cut spending. In fact, it's really hard
to slow the growth of spending in Washington. So that's
why you're seeing these meetings, these markups get canceled because
they don't know how to do it.
Speaker 5 (19:54):
Well.
Speaker 2 (19:54):
As we consider spending, we should also note that the
President and the White House released their so called skinny
budget today, Mick, in which the President is proposing base
non defense discretionary budget authority of one hundred and sixty
three billion dollars that is nearly twenty three percent below
current year spending. Is there any real chance of that
becoming reality?
Speaker 9 (20:16):
No? Not really. In fact, behind me, someplace over there
on the wall is the Wall Street Journal of cover story.
When we did the exact same thing in twenty eighteen.
I think it was the same almost I called RUSS
that I have given them the thunds up because I
think that's the same percentage reduction in non defense discretionary
spending that we had that he and I did it
together in twenty eighteen. No, it doesn't have a chance.
(20:37):
It has more of a chance now than it does,
and that did twenty eighteen because Donald Trump has more
control over his own party. But while there was, you know,
more than half of the Republicans on the hill hated
it back in twenty eighteen. Maybe still fifteen percent of
them hate it now. And you can't lose fifteen percent
of the vote. So look, the way the compromises get
(20:58):
done in Washington, DC is that you spend more, not less.
And my guess is that's what they're going to end
up doing. In some fashion. They'll figure out a way
to call it a reduction in spending. But look, RUSS
vote doesn't get a vote on how Congress spends money,
and Congress is going to want to spend more money.
Speaker 4 (21:19):
Does President care about this? We talk a lot about
deficit reduction and then we go ahead and pass a
bill with trillions of dollars in deficit spending. It kind
of looks like that's where we're going.
Speaker 9 (21:32):
I think he cares, but he cares more about getting
the tax bill extended. And I think right now, if
he came to him said, look, mister President, we have
to cut spending in order to get the tax bill passed,
he would say, I am now the biggest fan of
cutting spending. If you came to him and said it's
to President, we're going to have to raise taxes on
the super wealthy in order to pass your tax bill,
he's going to be the biggest fan of raising taxes
(21:53):
on the super wealthy. He wants the bill passed. But
here's the part. And you guys mentioned this in the
run up, and I don't think this is getting nearly
enough attention. The bill is not a tax cut. The
bill is an extension of the current tax rates. It's
the prevention of a tax increase. And I know that
sounds like it's a semantic difference, but it's not. If
you are an ordinary middle class American and you hear
(22:16):
Donald Trump go on TV and say I'm going to
give you a huge tax cut, technically he's correct because
the current law is that your taxes are going to
go up, and he's preventing that from happening. But if
you were expecting more money in your wallet if this
bill passes, you are going to be extraordinarily disappointed. And
that's going to be a hard sell for the Republican.
Speaker 2 (22:36):
Well, and is it an even harder sell because it
is not just being pitched as a tax cut, but
something that's going to offset potentially the detrimental impact of
the tariff policy.
Speaker 6 (22:45):
They say this is a one two punch.
Speaker 2 (22:46):
You got to wait for the tax portion as you
consider what this is going to do overall economically. But
mag you're suggesting that there's not going to be that
much juice in this, Yeah, well, yeah.
Speaker 9 (22:56):
This could be a little juice because a couple of
things have already phased out. I think the undred percent
expensing that we did in the twenty seventeen acts slowly
wound down, and resetting that to one hundred percent is
going to help is certainly help on business investment and
so forth, and ultimately help with economic growth. But again,
if you are an ordinary person trying to figure out
if you have enough money to buy toys for Christmas,
and you're counting on that big beautiful bill. That's not
(23:19):
going to help you. You are not going to have
more money in your pocket in order to pay for
the higher expensive the things that cost more because of tariffs.
And that's where I think the depth of the Republicans
have got a blind spot, especially in terms of a
pr message.
Speaker 4 (23:34):
Where's Donald Trump on tariffs? Make? So many people think
they can get inside the president's head on this, it's
become a question about whether tariffs or a negotiating tool
or a way to raise revenue. There is a group though,
and there are many Republicans who tell us off the air,
Donald Trump never intended to have a new tariff policy
(23:56):
in place. This is, in fact leverage that he's using
in a couple of months on the road. We're not
even going to be talking about this anymore. Wall Street
seems to be maybe warming up to that idea. We've
just round trip back to where we were before so
called Liberation Day. Bring us inside his head when it
comes to tariffs.
Speaker 9 (24:15):
Yeah, of course, that's been the sixty four thousand dollars
questions since Liberation Day? Is it? Are they the Peter
Navarro tariffs, which are tariffs for the sake of tariffs
staying forever as a way to sort of encourage domestic
production of textiles again, or are they tariffs excuse me,
for the sake of leverage getting better trade deals. I'm sorry,
(24:38):
And I think what we know now is it's the latter.
It's the more nuanced approach that Scott Bessett has been pushing.
I don't think they're going away to it. I don't
think Peter Navarro is having nearly the voice in the
White House that he's had the last couple of months.
Speaker 2 (24:52):
Well, someone who's a voice within the White House or
Trump's center circle is going to change.
Speaker 6 (24:56):
We learned yesterday Mick is.
Speaker 2 (24:58):
Mike Waltz, who's no longer Nowational Security Advisor, has now
become the nominee to be the US ambassador to the
United Nations. You obviously served in the first Trump administration.
You were familiar with the kind of turnover nature of it.
It's how you ended up at one point being acting
White House Chief of Staff. And I wonder what your
reaction was to yesterday's news that President Trump wasn't necessarily
(25:20):
letting him go. He's not getting fired, simply maybe being reassigned,
but Still, this is the first shakeup we have seen
in term two.
Speaker 9 (25:28):
It is, and I got a different perspective on it
than I think most people look. I think I like
Mike Waltz. I think they'll be hurt by having Mike
Waltz's influence not available to them in the in the
White House. I know who's in charge of immigration policy
in the White House, that's Steven Miller. I know who's
in charge of leading the discussion on spending, that's Russ Vote.
I sort of had the impression that Mike Waltz was
(25:49):
at least a leading voice on foreign policy in the
White House, and now he'll be gone, Okay, And I
think that's that's that hurts the White House. There's no
question losing the talent like Mike Waltz hurts. But here's
the part I think they're missing. They've nominated him for
a Senate confirmed position. I consider that you ambassadorship to
be a demotion. I think most people would. John Bolton
(26:09):
didn't go from NSC at National Security advisor to you
an ambassador, and he went the other way. Nikki Haley
would not have gone down, she would have only gone up.
But it is Senate confirmed what does that mean? The
Democrats are going to get the investigation into so called
signal Gate that they haven't been able to get up
(26:29):
to this point, and we are going to be hearing
about this for a long time. I think Mike Wallas
is ultimately confirmed for this position. I just wonder if
we don't go through an entire summertime of drip drip
of leaks about signal Gate that somehow get collateral damage,
most specifically Hag Saith the Defense.
Speaker 4 (26:48):
It seems like we are. We talked to Senator Chris
Koons about this last evening and they're already preparing for
those hearings. Mike, we're out of time. I've only got
thirty seconds left. Can he still be confirmed? He clear committee?
Speaker 9 (27:01):
Yeah? Yeah, No, he's he's qualified. He clear committee. It
was a mistake, There's no question. It was a stupid mistake.
It was a stake that rightly cost him his job.
But the man is imminently qualified for the position. I
think you'll be confirmed, all.
Speaker 6 (27:12):
Right, Mick mulvaney. Great to have you back here. On
Balance of Power.
Speaker 2 (27:15):
Former acting White House Chief of Staff in the first
Trump administration, former OMB director, former Republican congressman from South Carolina,
founder of the House Freedom Caucus.
Speaker 4 (27:24):
You got okay.
Speaker 2 (27:26):
It is a long resume joining us here on Bloomberg
TV and radio, and we still have much more ahead
of Our conversation with Democratic Congressman in New Jersey gubernatorial
candidate Mikey.
Speaker 6 (27:35):
Cheryl is just ahead on Bloomberg.
Speaker 1 (27:40):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm Eastern on
Alma Cocklay and Android Otto with the Bloomberg Business App.
Listen on demand wherever you get your podcasts, or watch
us live on YouTube.
Speaker 2 (27:56):
The first real turnover, or at least shaking up of
the second Trump administration is he announced that his National
Security Advisor, Mike Walts, who of course was embroiled in
the signal Gate scandal after his inadvertent addition of a
journalist to a chat that discussed who the attack plans,
is now the nominee to be Ambassador to the United Nations,
leading many to question the other person who was operative
(28:19):
in that signal Gate scandal, the Defense Secretary Pete Hegseth,
who actually texted the plans of the fighter jets the
weapons that would be used to strike the houthis and
what would happen to him? And it's something we had
a chance to ask Mikey Cheryl about earlier. She's a
Democratic congressman from New Jersey, also gubernatorial candidate in New
Jersey and happens to be a former Navy helicopter pilot
and sit on the Armed Services Committee.
Speaker 6 (28:40):
And this is what she said when we asked about
the Defense.
Speaker 10 (28:43):
Secretary Pete haig Seth needs to be fired. He is
somebody that has obviously given classified information out over signal,
which is not a classified platform and almost an explicable
He wasn't just done that text chain we're all aware
(29:03):
of with Mike Waltz. He was also on a separate
text chain with his wife and his brother, among other people.
So this is an infraction that would get a junior
pettiofficer court martialed. Certainly the Secretary of Defense needs to
be fired for this.
Speaker 4 (29:18):
You were backing an amendment to prevent the Secretary of
Defense from destroying records and historical artifacts at the Pentagon
and in our Service Academy's congresswoman. You said in a
recent Armed Services Committee meeting that he's taken why the
cage Bird Sings by Maya Angelou off library shells, but
left two copies of Adolf Hitler's mind KOMF Does this
amendment have the support to pass?
Speaker 10 (29:41):
Unfortunately we did not see that support in the House
Armed Services hearing that we held on it. Again, this
does not seem controversial to me. This erasure of history
of the service, particularly of black service members and women,
is on a front. I went to the Naval Academy,
(30:02):
I served for almost ten years as a helicopter pilot,
as a Russian policy officer, and I will tell you
the idea that somehow service women should not be there
is just infuriating when we have seen such brave and
great service from so many women, like our former cno
who is one of the first admirals fired by this administration,
(30:25):
and others. So at this point, I am just really
convinced that Pete Hegseth is a real cancer on the
military and certainly needs to be fired.
Speaker 2 (30:40):
As we consider the defense posture of the United States,
Congressman President Trump today is requesting a record one trillion
dollar national security budget. Is that level of spending justified
in the next fiscal year?
Speaker 10 (30:54):
Well, I don't think we saw the one hundred and
fifty billion dollar supplemental well justified because we didn't have
the safeguards in place as to where it would go.
We in the hearing tried to make sure that we
understood exactly what was being funded. There wasn't a lot
of clarity, and there weren't enough guardrails. So simply dumping
(31:17):
one hundred and fifty billion dollars much less at trillion
dollars onto this Pentagon when we have a Secretary of
Defense that has proven to be very incompetent, many of
the top leaders having resigned. You know, at this point,
we don't have a new chief of Naval Operations. I'm
(31:39):
not sure anybody at this point wants that job because
of the chaos that we're seeing at the top in
the Pentagon. So we really, I think, have a lot
of concerns. I have a lot of concerns as a
member of the House Armed Services Committee about what the
proposals are in this budget and what they will be funding.
Speaker 4 (31:58):
Well, it becomes a question as well of what is
we're spending this money on, regardless of the spending level. Congresswoman,
I know this is a debate that you're involved in
on Armed Services. There was reporting recently that Elon Musk
actually advised Secretary Hegseth on procurement that we should be
spending less money on the weapons systems and platforms of
(32:18):
the Cold War and investing more in drones and hypersonic missiles.
Is he right?
Speaker 10 (32:24):
I think that there's some truth in there. I think
what we saw, especially as we watched Ukraine, we saw
how important some of these drones and new technologies are.
I think the procurement process at the Pentagon is something
that I've been very concerned about for years, and I
think we can do a lot better. My concern though,
(32:45):
with somebody like Elon Musk advising this is the debacle
that he's created with the DOGE process, which has not
been thoughtful at all, which has actually fired a lot
of people that are critical to the running of our country,
people like air traffic controllers or people at the FDA
or the NIH. So I would be very concerned about
(33:10):
having Elon Musk run this process. And that's why at
the hearing we just had in Armed Services, we wanted
to understand what Doge was doing in the military. We've
got no clarity on that, which is just once again
related to my concerns about what's going on in the Pentagon,
especially under Secretary Higgseth.
Speaker 2 (33:30):
Congressman, I'd like to ask you as well about the
budget reconciliation process that is well underway on Capitol Hill.
Though it is kind of one party only, Democrats don't
really seem to be playing a role here. But I
wonder when you consider your constituents at home in New Jersey,
if you still think they might actually be net beneficiaries
of this ultimate tax package, if it is to include
(33:50):
a lifting of the salt cap.
Speaker 10 (33:53):
I think overall they will probably lose out because what
we're seeing is a six trillion dollar addition to the deficit,
higher than anything we saw under the Inflation Reduction Act
or the Bipartisan Infrastructure Law and the Cares Act combined,
and in fact, this huge increase of the deficit well
(34:15):
at the same time not funding some of the really
basic priorities of our state. One in three children use
Medicaid as their insurance. Many of our nursing homes use
Medicaid to care for people at the end of their life.
Many families are relying on that nursing home care for
their loved ones. So we also see these hits to
the Department of Education and the Title I funding a
(34:38):
lot of funding that goes to the disabled community. I
hear from that community quite often about what the future
holds for them. And then at the same time, beyond
just what we're seeing in reconcilation, we're seeing these huge
hits to the economy of New Jersey that are ongoing
because of the terror regime and the chaos coming out
of Washington. So I'm hearing from everyone from a coffee
(35:00):
shop in my town saying costs are going to go up,
to a builder in my area saying I've stopped all
my projects because HVAC systems are going up thirty to
forty percent. And then as concerning we're seeing the world
community is becoming really infuriated by the destabilization of the
world economy by the United States. So we're hearing Canadian
(35:22):
tourists are not going to come down the shore this summer,
which is going to be a huge hit to our economy.
We're also hearing from you manufacturers that I was talking
to one manufacturer saying, look, I had these orders from Germany.
They just called me to cancel the orders to say
they're not buying American anymore. So I'm not just concerned
(35:43):
about the short term consequences here, but some of the
long term consequences that we're seeing on the ground in
New Jersey.
Speaker 4 (35:49):
Well, we've spent the better part of this conversation talking
about the changing political realities here in Washington, and of
course there are national implications. If you become the next
governor of New Jersey, to what extent will you be
able to balance what's coming from Washington in the state
of New Jersey or is this Donald Trump's world?
Speaker 10 (36:09):
No, this is why I'm running for governor because I
think we can take a very different path forward in
New Jersey. We have so much opportunity in this state.
I think building houses so we can drive down housing costs,
making sure we're planning for utilities, because I firmly believe
that the state that can drive down utility costs and
produce the power of the future while driving down carbon
(36:31):
emissions is the state that is going to own the
innovation of the future. Investing in our broken healthcare system
and rethinking how we're delivering care to millions of people,
I think there is such an incredible amount of opportunity
here to show a different and distinct path away from
what we see coming out of Washington. What we see
(36:52):
is the attacks on the economy and the attacks on opportunity,
the attacks on just rights and freedom coming from Washington.
D C stand in the breach as New Jersey with
a different path forward, which I think is going to
be really.
Speaker 4 (37:05):
Compelling, fascinating conversation with the congresswoman, also a gubernatorial candidate.
Speaker 1 (37:12):
As you just heard, you're listening to the Bloomberg Balance
of Power podcast. Catch us live weekdays at noon and
five pm Eastern on Apple Cockley 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 played Bloomberg eleven thirty.
Speaker 4 (37:34):
Quite the rise in the markets here following that headline
of less than an hour ago coming from the Wall
Street Journal about an overture from Beijing when it comes
to trade, one of the President's most important issues, not
just trade in terrace, but also fentanel maybe an off
ramp here from China. According to the Wall Street Journal,
(37:54):
Wall Street is not waiting around to find out with
new highs for the day with us now a little
bit earlier than usual is my partner Kayley Lines here
on Balance of Power for an important conversation that we're
going to have with Mallory McMorrow. It's been an interesting
day here in news though, coming off the date of
this morning the news from China, maybe we'll get some
more clarity on this. I think it was Kevin Hassett
(38:17):
yesterday who said there was trade news coming. We didn't
get it yesterday, but that doesn't mean it can't happen
on Friday.
Speaker 2 (38:22):
Yeah, so they keep us waiting, And of course this
news from the Journal comes after the Chinese Ministry of
Commerce signal that it is evaluating whether or not to
open talks with the United States on trade overall. But
the fact that this reporting suggests they're looking at fentanyl
specifically speaks to the very myriad range of issues that
the US is using tariffs to address with China. It
(38:42):
is not just about their over capacity in terms of
supplying the global markets and what he sees is a
way too large trade deficit. It's also about things like fentanyl,
and as we always have it's a question of how
much tariffs are intended to address those issues or how
much it is about on shoring US manufacturing American workers,
because that was the argument, of course, he was making
(39:03):
as he celebrated one hundred days in office in Michigan
last week.
Speaker 4 (39:06):
That's right. Well, it brings us to the dichotomy that
we were talking about a little bit earlier this hour,
and Michigan is a great example of that when it
comes to auto tariffs, for instance, in the C suites,
and we've heard from Mary Barrow, we've heard from the
executives at all of the major US automakers. Jim Farley
certainly had strong feelings about tariffs. This is a massive
disruption in their supply chains and potentially in their business.
(39:29):
They're pulling guidance. But when you talk to auto workers
on the manufacturing floor, they love this idea and many
of them voted for Donald Trump.
Speaker 6 (39:38):
Yeah, that's right.
Speaker 2 (39:38):
Sean Fain, who leads the United Auto Workers, has been
wholly supportive of the idea of auto tariffs specifically. And
it becomes a question of is it something that is
different for the companies than it is for the workers
who are actually putting together these cars, And of course
that is a key constituency in states like Michigan.
Speaker 4 (39:56):
Well, this is the backdrop for our conversation that we've
been looking for or to and telling you about. Mallory
mcmorro is with US Democratic Michigan State senator and now
a candidate for US Senate, having been framed repeatedly as
a rising star in the Democratic Party. Mallory McMorrow, Welcome
to Bloomberg. It's great to have you with us as
we have this conversation about trade and tariff specific to Michigan.
(40:20):
Just want to ask you more broadly. This past election
saw Michigan elect Eliza Slotkin and Donald Trump on the
same ballot. When we consider the message that you're honing
now as a new generation on the campaign trail, what
is it that national Democrats misunderstand about your state.
Speaker 11 (40:40):
Michiganders are fiercely independent, and it's so great to be
with both of you to share a little bit more
of why this is a state that in the nineteen
eighties had five of the top ten metro regions in
the entire country for median household income. So this idea
of this vision of make America great again, I think
compelling to a lot of Michiganders who remember vividly when
(41:04):
we were the most prosperous state in the country, and
there is a longing to recapture that prosperity, and the
question is how so. I think that is a reason
why many Michiganders may have voted for Donald Trump, but
also see the appeal in somebody like Alissa Slotkin, somebody
who is no BS. She will tell it to you straight.
(41:27):
She brings a strong national security background with her work
in the CIA, and I think a lot of Michiganders
respect the fact that Alissa served under both Presidents Bush
and Obama. In a moment where we see nothing but division,
people want to see their elected leaders work together. So
my campaign is really centered on this idea of making
(41:50):
a new American dream, acknowledging that we can't recreate the
prosperity of our past by going backwards and leaning into
my own story. I'm a millennial who graduated right into
the recession. I had no job prospects, I had no
health insurance. I lived in the back of my car
for a few nights, applied to three hundred jobs. And
I talked to michigan ors across this state who share
(42:11):
that sentiment and frustration of having done everything right and
still feeling like they're behind and they're not getting ahead,
and they don't have stability. So this is going to
be about three things, success, safety, and sanity, and writing
that new American dream together in a way that people
can see themselves in. That isn't just about Donald Trump.
(42:32):
It's not about, you know, relitigating what he's doing or
not doing. It's about what our future looks like.
Speaker 2 (42:39):
Well, and we do want to get into the fact
that you are a millennial and kind of the generational
question now at play with the Democratic Party and what
you might represent. But to touch back on your point
around prosperity and what it will take to return it.
For those who were gathered at the rally in Macomb
County earlier this week, as Donald Trump talked about the
Reagan Democrats and the auto workers who he thinks his
policies will benefit, what is your message to that particular
(43:02):
part of Michigan's constituency that you are seeking to represent,
who feel like these policies actually would serve to benefit them.
Speaker 11 (43:10):
There is a world where a thoughtful trade policy, thoughtful
tariff policy could do things like bring a third or
fourth shift back on some of our manufacturing facilities that
have laid workers off or have idled. But what we're
seeing now is the broad expansive tariffs that went on
after the announcement of the auto tariffs on everyday goods
(43:32):
from clothes to coffee to bananas to diapers is going
to devastate workers. So the approach that I have that
I hope michiganders here is that we have to be
thoughtful as we put policy forward and not have this
approach that I think we've seen out of the Trump
administration of ready fire aim of let's just announce things,
(43:53):
see how they go. And I think Michigan really, for
the rest of the country is a canary in the
coal mine. We saw some strong jobs numbers come out
this morning. However, Michigan has the second highest increase in
unemployment in the entire country or unemployment rate is sitting
right now around five point five percent. We've seen layoffs
at stalantis, at suppliers, at small business owners, and we
(44:17):
see that ripple effect play out where you know, over
in Long Beach, the longshorem and put out a really critical,
strong letter about the impact that this is going to
have to jobs in the economy. If we don't see
some measuring in the approach to tariff policy. So I
am heartened by some of the news out of Beijing
(44:38):
that you just mentioned, but we're going to have to
see some stability and not the chaos that we've seen
so far.
Speaker 4 (44:45):
There's a question about whether it's to engage right now.
James Carvel would say Democrats should hibernate, give Trump the rope.
Governor Gretchen Whitmer was criticized, as I'm sure you saw,
by a lot of Democrats for coming to Washington to
meet with President Trump. There was a bit of an
awkward Oval Office appearance. But then days later we learned
that Selfridge Air Base would get a new fighter wing,
(45:05):
which she lobbied for. So is your governor actually the
smartest one in the room?
Speaker 11 (45:11):
I think what people want to see right now is
that you know not only how to fight, but when
to fight and when not to fight. Governor Whitmer is
in one of the most difficult positions that I think
any governor is in in the country. We have seen
a president who is willing to carry out vengeance and
retribution on governors who dare to stand up to him.
(45:33):
We saw this with Governor Mills and Trump rescinding funding
from her state. So Governor Whitmer has a track record
of standing up strong against Donald Trump. But at the
end of the day, she has to protect and deliver
for Michigander. So she went out to that Oval Office
meeting to advocate for a new mission at Selfridge Air
(45:53):
Force Base in Macomb County, and we saw that come
to light last week and the end of the day,
what I'm hearing from Michiganders is that they are grateful
that she understands when to work with him, I think
when to work against him, maybe stand up to him.
She's not compromising her values. She's still a strong advocate
(46:15):
for reproductive rights, for women's rights, for voting rights, all
of the things that we need to stand up for.
But also knows that, you know, Selford Air Force Base
delivers eight hundred and eighty million dollars of economic activity
in southeast Michigan and in for our state. That is
essential for the success of our state. And she knew
the only way we were going to get that was
by meeting him, by flattering him, and she did that
(46:38):
and did it successfully.
Speaker 2 (46:41):
As you talk about values here, Mallory and the kind
of the values that do unite the Democratic Party. I
think we all also know that there are plenty of
fissures within the party itself, especially in the aftermath of
the twenty twenty four election and in the contested primary
in which you are competing, including against the incumbent Congressman
Hailey Stevens, for that Senate seat. Is that risk bringing
(47:01):
to light some of those deep fissures. And I wonder
what aspect what part of the Democratic Party you see
yourself representing here?
Speaker 11 (47:10):
You know, I don't think so. One of the things
that I believe has been frustrating for voters across the
political spectrum is feeling like the parties are making decisions
for them, that voters do not have a choice as
to which their preferred candidate is. I think that was
some of the frustration that I heard on the ground
(47:33):
in twenty twenty four from the Democratic Party. I think
Vice President Harris was put in a nearly impossible situation.
I think that she did an incredible job with the
one hundred days or so that she had to mount
a campaign. But I also heard from voters who said
that they really wanted to have a primary that if
President Biden was not going to seek the reelection or
(47:55):
was unable to that voters should decide. So I'm excited
about having a primary that is going to give Michiganders
the option, the ability to look at multiple candidates, look
at their platforms, look at their approach. My sense in
this moment to answer the second half of your question,
is that this is going to be an election decided
(48:17):
less by where a candidate falls in the political spectrum,
whether they are a progressive, moderate or somewhere in between,
and more about what their approach is. And that is
where I think I fit. I have been a very
pragmatic legislator here in the Michigan Senate. I came into
office flipping a Republican district in twenty eighteen. My predecessor
(48:40):
had won by fourteen points. I beat him by four
So we swung a district almost twenty points in the
first cycle. And I did that by appealing to a
lot of voters across Oakland County who saw me and
they said, you remind me a lot of my daughter
who left and went to Chicago or New York or Denver.
Why are you in Michigan and what can we do
to bring my kids back, and that is a value
(49:02):
that I think is universal, that Michigan should be a
place of opportunity and family, and that this should be
a place where people want to stay, invest, start a family,
buy a house. And that is the approach that I'm
taking into this election. That I feel like this is
less about re litigating maybe a twenty sixteen political fight
(49:22):
where you know, it's the Bernie wing versus the Hillary wing,
and people are looking for somebody who stands up and
communicates and believes that we have a future after the
Trump presidency, knows how to articulate what that is and
shows that they're willing to fight for Michiganders.
Speaker 2 (49:41):
All right, Mallory, we appreciate you joining us. Mallory Morrow
is a Democratic state senator in Michigan and of course
is candidate for a Senate seat in Michigan as well.
Speaker 6 (49:51):
Thank you for being.
Speaker 4 (49:51):
Here, Thanks for listening to the Balance of Power podcast.
Make sure to subscribe if you haven't all a ready
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(00:20):
you get your podcasts, or watch us live on YouTube.
Speaker 2 (00:25):
The Jobs Friday addition and a Job's Friday market that
we are all experiencing is Charlie was just running us
through because it was indeed a hot payrolls print we
got today actually one that our economists here at Bloomberg
Economics might have predicted. They thought this was going to
come in higher than the consensus call. And indeed, one
hundred and seventy seven thousand job editions in the month
of March is what we got. Something the White House
(00:47):
is touting. Stephen Meyer, and who chairs the Council of
Economic Advisors over there, joined Bloomberg earlier today.
Speaker 3 (00:54):
There's been an ongoing disconnect between the hard data and
the soft data, and the hard data continue to perform
very well. Hundred and seventy seven thousand jobs last month,
a beat of forty thousand jobs. That's the President's second
jobs they beat in a row. And on top of that,
you've got eleven thousand construction jobs, you know, expanding and
expanding construction construction sector in spite of the President's cut
crack down on the border.
Speaker 4 (01:15):
So there you have it. Non farm payrolls increasing by
one hundred and seventy seven thousand last month, and nobody
came closer than Anna Wong, who joins us right now
Bloomberg Economics chief US economist, and it's great to see you.
The headlines all seem to read the same, hotter than
expected despite uncertainty over tariffs. Is that how you see it?
Speaker 5 (01:35):
Yeah, So we basically predicted this right, but I also
said in our preview that this would be the last
solid print before we're about to have very too, very
weak print. And even this solid print surprised me in
some with some details on how weak certain things are.
So i'll tell you, Joe. The thing that surprised me
(01:57):
was that the gains in professional and businesses sector, which
is what we expected, actually largely came from employment services.
So basically, employment services are the people who are helping
temp agencies, helping filled helping people who are jobless to
get temp jobs. So essentially, the support to payrolls print
(02:19):
today is due to an increase in demand of jobs
of helping jobless people.
Speaker 2 (02:26):
Okay, well, that is definitely important to consider as we
look at the kind of breakdown here. There's also the
fact that manufacturing was not seeing job expansion. Instead, those
jobs went down by about one thousand last month. What
is that signal, Anna, Because we've talked about how it's
manufacturers that actually felt the effects of these tariffs largely.
Speaker 5 (02:44):
First, yes, and so any economic models would predict that
the indicated decaters that would be showing the earliest evidence
of the impact of tariff would be ism manufacturing, and
we did see it today. I mean this week that
in the survey kits that firms are resorting to layoffs now.
So that's why we have seen a negative change in
(03:08):
payrolls today for manufacturing sectors. In the coming to payrolls report,
we are expecting a significant slow down in logistics and
trade sector. And usually basically in May and in June
and July, you're supposed to see bustling of activity in
the ports because firms are very busy getting the shipments
(03:29):
off the boats, transporting those goods that are about to
stock up the shelf and home deepot for ahead of
Halloween for you know, and target for go to getting
back to school. All those are supposed to be arriving
on the ports in May and June, and we are
not going to see that because of the disruption. We're
already seeing there are only you know, thirty five ships
(03:51):
leaving China for US as of two days ago. Nothing
could change that. Even if there's a one hundred percent
pivot in today, we are still not going to see
the goods in the ports in the first two weeks
of May.
Speaker 4 (04:07):
Fascinating. We heard from Elon Musk this week talking about
the efforts of the DOGE or the accomplishments of the DOGE.
Of course, the original intention was to find two trillion
dollars in cuts. They got to one hundred and sixty billion.
He said, also put a number on job cuts one
percent of the federal workforce, twenty thousand people. Does a
number like that have an impact in the jobs data
(04:29):
or is that much smaller than some people expected and
it's a blip on the radar.
Speaker 5 (04:33):
Yeah, So one hundred and fifty billion, if we take
that number at face value, is basically where our baseline was.
You know even I remember Scott Bessen two months ago
when he did an interview with Bloomberg here with Saleja,
our reporter Saleja, he said that it would be already
(04:54):
you know, a cherry and a cake to have two
hundred billion cuts. So that is something. And also in
terms of the reduction and federal workforce that Joe, remember
that the key piece is actually the hiring free. Every year,
about one hundred twenty two hundred and fifty thousand federal
workers self retire or just naturally go through attrition, and
(05:19):
so by not refilling that that replacing those jobs, you're
actually slowly downsizing the federal government workforce. And by twenty
twenty eight, at the end of this Trump administration, the
federal workforce would be maybe at least six to ten
percent smaller than when it begins.
Speaker 2 (05:38):
Well, of course, we have a long way to go
until we get to twenty twenty eight. Just judging by
how twenty twenty five has gone so far, probably it's
going to feel like a lot more than just four years.
And finally, on the data today, when we consider that
we actually had cooler wage growth than expected. Knowing we've
had this ongoing conversation about, Oh, what's going to happen
if the FED is faced with both inflationary and growth
risk at the same time, what do they do? Does
(06:00):
that actually suggest that some of those inflationary pressures you
might be worried about are not present at least right now.
Speaker 6 (06:07):
Yeah.
Speaker 5 (06:07):
So keep in mind that our team has been saying
that the core PCEE inflation would not be as high
as what the consensus is saying and what the FED
is projecting, because precisely for that reason, Kayley, we think
that the service sector, which is more important for the
US economy it accounts for about seventy percent of CBI basket,
(06:30):
that part of the economy is going to soften, and
as a result, that disinflationary pressure from the services will
offset some of the goods price inflation that we might
be seeing. So on net, we just don't think that
the tariff shock will ultimately lead to a three point
five to four point zero core pc inflation that internal
(06:50):
FED forecast might be showing.
Speaker 2 (06:53):
All right, of course we'll be hearing from the FED
on Wednesday. Wonder how that data will factor into the
fact that they're very likely to not do anything with
rates next week, and along of Bloomberg Economics joining us
on this Jobs Today. Thank you so much, and we
want to continue the conversation now as we turn to
Catherine Edwards, who's an economic policy consultant and a contributor
to Bloomberg Opinion here with us on Bloomberg TV and Radio.
Speaker 6 (07:13):
Catherine, welcome back.
Speaker 2 (07:14):
I wonder you're reading of the jobs report today, knowing
we've been talking to you for months now about concern
you have around what could be a deterioration in the
labor market. Doesn't look like we're seeing that much evidence
of it yet.
Speaker 7 (07:28):
No, I would call this a muted, if not boring
jobs report. I mean, we're we're all looking through it
with a fine tooth comb, but there's really not that
much there. And I think it's expected given the timing
of the bigger tariff announcements. The data is collected just
in the second week of the month, so it would
have been pretty radical for the tariffs to have affected
the labor markets so quickly and so intangibly. The way
(07:51):
that the mechanisms of a tariff affecting the labor market
now are pretty well understood, but they don't happen as
fast as a week and a half from an announcement.
Speaker 4 (08:02):
So what's your trajectory then for the job market. We
just got a GDP showing contraction in the first quarter.
We're seeing recession odds go up. Some suggest we're in
a recession already once we work through the next couple
of months. The impact of tariff uncertainty, the federal worker
layoffs that we were just discussing, with a broader slowdown
(08:24):
economically means what for this job market.
Speaker 7 (08:28):
You know, I went through the beij book that was
reported in April to hear what the Federal Reserve regional
branches are hearing from employers in their districts, and you'll
see kind of throughout the reports not starting layoffs, but
making preparation for reductions in headcount. Right, they have not
felt the need to cut their jobs, but they are
(08:49):
preparing for a headcount reduction. And this definitely dovetails with
what we are seeing in consumer sentiment. Now. It's very
easy for people to kind of dismiss consumer sentiment of
like this is just the history of people, it's driven
by politics, But there's really good economic research behind the
tangible aspect of consumer sentiment. Is people who have information
(09:09):
that has not manifested in the economy yet. So this
would be something like your boss tells you your job's
going to end in June. You still have a job,
but you know something bad is coming. Or they tell
you if look, if more ships don't leave China and
these ports aren't busy, all of you are furloughed by
may or by mend of May. Right, there is a
sense in which consumer sentiment reflects information that people have
(09:31):
about where the economy is going, and this is why
it can tank kind of leading up to and is
considered a leading recession indicator. I think that those two
things combined, you know, they're worrisome. And we still haven't
seen an uptick in hiring. We still haven't seen employers
really expanding payrolls to a great degree. And one thing
that Anna didn't mention is that about a third of
(09:52):
job growth entirely this year comes from the health sector,
which is not a reflection of economic activity. That's rather.
Speaker 2 (10:03):
Sure when you were referring to the idea that ships
aren't necessarily going to be coming in from China. We
heard from President Trump when he was at the meeting
of his cabinet earlier this week, talking about dolls, that
maybe children will only have two dolls instead of thirty,
and maybe those dolls will cost.
Speaker 6 (10:19):
A few dollars more.
Speaker 2 (10:20):
And I wonder if you see that as recognition of
an economic reality on the part of President Trump that
to this point he has seemed reluctant to adopt or acknowledge.
Speaker 7 (10:31):
I mean, I think that this is another flip flop
from someone who changes his mind all the time. I
mean this, remember that we had in January and February
kind of dismissive concerns that economic pain was necessary, and
then we had following in March in April that the
FED just needs to cooperate with him. And so now
it's we're not going to have pain, but we will
have fewer dolls. I mean, I think it's just a
lack of consistency that we've seen top to bottom with
(10:54):
these tariffs. I mean, think about what was put on
a placard in the rose garden that didn't apply with
even in two weeks, or how deliberate were the numbers
that went up on a placard in a rose garden
that the Internet toured apart really an under an hour
that it wasn't really reflective of actual economic realities or
the relationships we have in terms of trade with other countries.
So I think there is a part of economic uncertainty
(11:17):
that is hard to place that comes from a distrust
of leadership. So we can negotiate trade agreements, we can
get things back on board. But you know, I don't
know how many businesses think that there is going to
be consistent economic policy or messaging coming from the White House.
Speaker 4 (11:34):
Did Donald Trump just recognize reality though? Catherine? What will
this mean when it comes to back to school shopping?
This is going to be a massive story late summer
going into fall, and then there's going to be the
story about Christmas being canceled?
Speaker 5 (11:48):
Right?
Speaker 4 (11:49):
Is there any way to turn this around?
Speaker 7 (11:51):
You know, of course, like you should never give up
on the US economy and you should never give up
on good policy being able to make a difference. I
think that many people are scared. And I know that
the stock market is on a winning streak and that's great,
But the terror that is inflicted on savers when they
see their four oh one K take a nose dive
that doesn't bounce back as much as the SMP does
within a couple of weeks, there is a real fear
(12:13):
and vulnerability that goes into consumer thinking. And if you
hear from your boss we might have to do layoffs
in the summer, and you look at your four oh
one K balance at the wrong week in April and
you get scared about the future. You're not going to
spend money the same way. It's possible to turn mood
and sentiment around, but telling people fewer dolls is in
their future is probably not the way to do it.
Speaker 8 (12:36):
Well.
Speaker 2 (12:36):
And if we consider what the implication of a slowdown
in consumption would be, knowing that consumers are the engine
of the US economy, Catherine, that's where all of this
kind of recessionary talk comes in. Even the President has
said he thinks that there could be an economic slowdown
if the FED does not cut rates in time. A
repeated suggestion that the FED risks being too late here,
(12:56):
as they have in the President's mind been in the past.
And I wonder if you actually think there is some
truth to that notion that the FED is likely to
be late to react, just by the function of monetary
policy in the lag with which it works.
Speaker 7 (13:10):
The FED, you know, doesn't serve one master, but the
US economy and they've got to act within the stewardship
of the US economy providing stability and certainty going forward.
And you know, if the President says johnthan Powell says
how high, that is even worse case scenario than a recession,
and that's a permanent hit to our economy and stability.
So we have to trust the Fed to put all
(13:31):
of the data on the table and have a broad
based decision making that isn't just about you know, intervening
during a time of uncertainty. And you know, frankly, like
what the US economy needs is stability uncertainty. And so
I think that this is what has made the tariff
rollout so doubly dangerous because as you mentioned, Kaylee, you know,
there is a certain degree to which recessions become self fulfilling.
(13:53):
That as people get more scared, they pull back on spending.
That declines economic activity because they're the engine of economic growth,
and that accelerates a decline, you know, as we're rolling
down the hill. So I, you know, I think Powell
being stayed here is really the antidote for a lot
of people's fears, you know, to the extent that they
pay attention as much as understanding the federal in the economy,
(14:15):
which which could be a leap for a lot of people.
But I think, as you know, people like us who
are in deep on following what is going on in
the details of the economy, it is nice to see
Powell putting data in the economy first.
Speaker 4 (14:28):
That's great to have you back, Catherine, economic policy consultant,
Bloomberg opinion contributor Edwards with her view on the economy.
Just days away from the next FED meeting. He's got
his work cut out for him next week, Kaylee, J.
Powell is going to face questions about tariffs and Trump.
And you wonder if he brings any nuances that we
haven't heard yet to this conversation.
Speaker 2 (14:48):
Yeah, of course, we've already heard repeatedly from him. The
FED operates independently, that independence is protected by law. They
feel that they have the flexibility here to wait and see.
There's too much policy uncertainty. He's probably not going to
signal hey, I'm thinking about cutting rates anytimes.
Speaker 4 (15:05):
You don't even need to watch it now, Yes, listen
to Kaylee. Mick Mulvaney's on the way in. Yeah, we
have been talk to making some time. He'll join us
next with the view from the Republican Party, our Trump
whisperer on the way in here. As Donald Trump spends
the weekend at mar Alago, we'll have much more straight
ahead on Bloomberg.
Speaker 1 (15:23):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm. He's durn
on Apple, Cocklay 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 eleven
thirty with.
Speaker 6 (15:43):
A look at the Friday trade.
Speaker 2 (15:44):
What could be the best rally or closing the best
nine day rally we've seen on the S and P
five hundred, the first time we've seen a nine day
rally like that going.
Speaker 6 (15:52):
Back to two thousand and four.
Speaker 2 (15:54):
As we could consider jobs and trade, and I wonder
there's a question as to whether or not the market
is also discounting the focus now being on tax cuts
that could be coming down the line as Congress is
still working on its budget reconciliation package. Though of course
they're not in town today, it's Friday, way would they be.
They're going to come back next week though, and the
House particularly is going to keep working though It's interesting
(16:16):
they actually have decided to punt on the markups and
some key committees of their pieces of legislation. The Energy
and Commerce Committee, which is still dealing with a massive
question around medicaid, the Ways and Means Committee, which actually
has to be the architect of this tax package. What's
going to be included, potentially a lifting of the salt cap.
(16:38):
Are they going to really not tax overtime tips or
Social Security and all of those various components. So there
still is a lot of work to do. But President
Trump Alice yesterday in the White House Rose Garden was
sounding optimistic because he still wants to see this one
big package come to fruition.
Speaker 8 (16:54):
The progress of the one big beautiful bill. We love
that bill. I won't like it if it doesn't pass,
neither will you doesn't pass. Your taxes are going to
go up sixty eight percent. These will be the biggest
tax cuts in American history, with one hundred percent expensing,
which is something that people cannot believe they getting. We
(17:14):
did it in the last one and we had the
most successful economy in my first four years. That we've
ever had the history of our country.
Speaker 4 (17:22):
Which brings us to our conversation with Mick Mulvaney, the
former acting White House Chief of Staff, former Republican congressman
who helped found the Freedom Caucus, and a former OMB
director is with us now. It's been a long time, Mick,
welcome back. Great to see you. You're no stranger to
this process or the President of the United States. And
so I want to pick up on what Kaylee mentioned,
(17:44):
the delayed markups for energy and commerce, ways and means agriculture.
At some point they're going to have to get to this.
And the matter of Medicaid has people in a bind.
The President says there will be no cuts. Speaker says,
we're not going to do it. There are members of
your former Freedom Caucus who want to see dramatic cuts.
(18:05):
But if we hold the line on this and make
good on what Donald Trump is saying there will be
no cuts to Medicare or Medicaid, where do you find
the money.
Speaker 9 (18:14):
Hello, what happy Friday. Nice to see you guys working
on a Friday. Kaylee, You're getting a little bit cynical
about Washington d C. So look, they keep in mind that,
and I had this conversation with the There's a lot
of questions that wrapp up. Let me take the last
one about Medicare and Medicaid. When Donald Trump says there's
been no cuts to Medicare and Medicaid. I've had that
(18:35):
conversation personally Donald Trump a dozen times. And when he said,
Mickey can't cut Medicare in our twenty eighteen budget, for example,
soa mster president, what is Medicare to you? So well,
Medicare is what people get when they turn to the
healthcare they get when they're sixty five. I said, you know,
you're absolutely right, and I'm not going to touch that.
Can I please have your permission to go and look
at reducing spending or reforming everything else that's cump falls
(18:57):
under Medicare that people don't know about, most people don't
care about. He said, what do you mean? I said,
I ran down the fifteen different programs that are funded
out of this giant pot of money that medicare. He said,
that's not Medicare. So mister President, technically it is. He
goes good fix that. Our budget in twenty eighteen was
the largest entitlement reform proposal in history, but did not
touch these over sixty five health care benefits and did
(19:19):
not touch old age income supplements for Social Security, but
it still cut Social Security reform, medicare, those types of things.
So you have to watch the language. The bottom line, though,
to your point show is great.
Speaker 4 (19:30):
It's hard.
Speaker 9 (19:30):
It's really really hard. When we did that in the
budget twenty eighteen, the people who hated it the most
were Republicans in the Senate, and that hasn't changed. It's really, really,
really hard to cut spending. In fact, it's really hard
to slow the growth of spending in Washington. So that's
why you're seeing these meetings, these markups get canceled because
they don't know how to do it.
Speaker 5 (19:54):
Well.
Speaker 2 (19:54):
As we consider spending, we should also note that the
President and the White House released their so called skinny
budget today, Mick, in which the President is proposing base
non defense discretionary budget authority of one hundred and sixty
three billion dollars that is nearly twenty three percent below
current year spending. Is there any real chance of that
becoming reality?
Speaker 9 (20:16):
No? Not really. In fact, behind me, someplace over there
on the wall is the Wall Street Journal of cover story.
When we did the exact same thing in twenty eighteen.
I think it was the same almost I called RUSS
that I have given them the thunds up because I
think that's the same percentage reduction in non defense discretionary
spending that we had that he and I did it
together in twenty eighteen. No, it doesn't have a chance.
(20:37):
It has more of a chance now than it does,
and that did twenty eighteen because Donald Trump has more
control over his own party. But while there was, you know,
more than half of the Republicans on the hill hated
it back in twenty eighteen. Maybe still fifteen percent of
them hate it now. And you can't lose fifteen percent
of the vote. So look, the way the compromises get
(20:58):
done in Washington, DC is that you spend more, not less.
And my guess is that's what they're going to end
up doing. In some fashion. They'll figure out a way
to call it a reduction in spending. But look, RUSS
vote doesn't get a vote on how Congress spends money,
and Congress is going to want to spend more money.
Speaker 4 (21:19):
Does President care about this? We talk a lot about
deficit reduction and then we go ahead and pass a
bill with trillions of dollars in deficit spending. It kind
of looks like that's where we're going.
Speaker 9 (21:32):
I think he cares, but he cares more about getting
the tax bill extended. And I think right now, if
he came to him said, look, mister President, we have
to cut spending in order to get the tax bill passed,
he would say, I am now the biggest fan of
cutting spending. If you came to him and said it's
to President, we're going to have to raise taxes on
the super wealthy in order to pass your tax bill,
he's going to be the biggest fan of raising taxes
(21:53):
on the super wealthy. He wants the bill passed. But
here's the part. And you guys mentioned this in the
run up, and I don't think this is getting nearly
enough attention. The bill is not a tax cut. The
bill is an extension of the current tax rates. It's
the prevention of a tax increase. And I know that
sounds like it's a semantic difference, but it's not. If
you are an ordinary middle class American and you hear
(22:16):
Donald Trump go on TV and say I'm going to
give you a huge tax cut, technically he's correct because
the current law is that your taxes are going to
go up, and he's preventing that from happening. But if
you were expecting more money in your wallet if this
bill passes, you are going to be extraordinarily disappointed. And
that's going to be a hard sell for the Republican.
Speaker 2 (22:36):
Well, and is it an even harder sell because it
is not just being pitched as a tax cut, but
something that's going to offset potentially the detrimental impact of
the tariff policy.
Speaker 6 (22:45):
They say this is a one two punch.
Speaker 2 (22:46):
You got to wait for the tax portion as you
consider what this is going to do overall economically. But
mag you're suggesting that there's not going to be that
much juice in this, Yeah, well, yeah.
Speaker 9 (22:56):
This could be a little juice because a couple of
things have already phased out. I think the undred percent
expensing that we did in the twenty seventeen acts slowly
wound down, and resetting that to one hundred percent is
going to help is certainly help on business investment and
so forth, and ultimately help with economic growth. But again,
if you are an ordinary person trying to figure out
if you have enough money to buy toys for Christmas,
and you're counting on that big beautiful bill. That's not
(23:19):
going to help you. You are not going to have
more money in your pocket in order to pay for
the higher expensive the things that cost more because of tariffs.
And that's where I think the depth of the Republicans
have got a blind spot, especially in terms of a
pr message.
Speaker 4 (23:34):
Where's Donald Trump on tariffs? Make? So many people think
they can get inside the president's head on this, it's
become a question about whether tariffs or a negotiating tool
or a way to raise revenue. There is a group though,
and there are many Republicans who tell us off the air,
Donald Trump never intended to have a new tariff policy
(23:56):
in place. This is, in fact leverage that he's using
in a couple of months on the road. We're not
even going to be talking about this anymore. Wall Street
seems to be maybe warming up to that idea. We've
just round trip back to where we were before so
called Liberation Day. Bring us inside his head when it
comes to tariffs.
Speaker 9 (24:15):
Yeah, of course, that's been the sixty four thousand dollars
questions since Liberation Day? Is it? Are they the Peter
Navarro tariffs, which are tariffs for the sake of tariffs
staying forever as a way to sort of encourage domestic
production of textiles again, or are they tariffs excuse me,
for the sake of leverage getting better trade deals. I'm sorry,
(24:38):
And I think what we know now is it's the latter.
It's the more nuanced approach that Scott Bessett has been pushing.
I don't think they're going away to it. I don't
think Peter Navarro is having nearly the voice in the
White House that he's had the last couple of months.
Speaker 2 (24:52):
Well, someone who's a voice within the White House or
Trump's center circle is going to change.
Speaker 6 (24:56):
We learned yesterday Mick is.
Speaker 2 (24:58):
Mike Waltz, who's no longer Nowational Security Advisor, has now
become the nominee to be the US ambassador to the
United Nations. You obviously served in the first Trump administration.
You were familiar with the kind of turnover nature of it.
It's how you ended up at one point being acting
White House Chief of Staff. And I wonder what your
reaction was to yesterday's news that President Trump wasn't necessarily
(25:20):
letting him go. He's not getting fired, simply maybe being reassigned,
but Still, this is the first shakeup we have seen
in term two.
Speaker 9 (25:28):
It is, and I got a different perspective on it
than I think most people look. I think I like
Mike Waltz. I think they'll be hurt by having Mike
Waltz's influence not available to them in the in the
White House. I know who's in charge of immigration policy
in the White House, that's Steven Miller. I know who's
in charge of leading the discussion on spending, that's Russ Vote.
I sort of had the impression that Mike Waltz was
(25:49):
at least a leading voice on foreign policy in the
White House, and now he'll be gone, Okay, And I
think that's that's that hurts the White House. There's no
question losing the talent like Mike Waltz hurts. But here's
the part I think they're missing. They've nominated him for
a Senate confirmed position. I consider that you ambassadorship to
be a demotion. I think most people would. John Bolton
(26:09):
didn't go from NSC at National Security advisor to you
an ambassador, and he went the other way. Nikki Haley
would not have gone down, she would have only gone up.
But it is Senate confirmed what does that mean? The
Democrats are going to get the investigation into so called
signal Gate that they haven't been able to get up
(26:29):
to this point, and we are going to be hearing
about this for a long time. I think Mike Wallas
is ultimately confirmed for this position. I just wonder if
we don't go through an entire summertime of drip drip
of leaks about signal Gate that somehow get collateral damage,
most specifically Hag Saith the Defense.
Speaker 4 (26:48):
It seems like we are. We talked to Senator Chris
Koons about this last evening and they're already preparing for
those hearings. Mike, we're out of time. I've only got
thirty seconds left. Can he still be confirmed? He clear committee?
Speaker 9 (27:01):
Yeah? Yeah, No, he's he's qualified. He clear committee. It
was a mistake, There's no question. It was a stupid mistake.
It was a stake that rightly cost him his job.
But the man is imminently qualified for the position. I
think you'll be confirmed, all.
Speaker 6 (27:12):
Right, Mick mulvaney. Great to have you back here. On
Balance of Power.
Speaker 2 (27:15):
Former acting White House Chief of Staff in the first
Trump administration, former OMB director, former Republican congressman from South Carolina,
founder of the House Freedom Caucus.
Speaker 4 (27:24):
You got okay.
Speaker 2 (27:26):
It is a long resume joining us here on Bloomberg
TV and radio, and we still have much more ahead
of Our conversation with Democratic Congressman in New Jersey gubernatorial
candidate Mikey.
Speaker 6 (27:35):
Cheryl is just ahead on Bloomberg.
Speaker 1 (27:40):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm Eastern on
Alma Cocklay and Android Otto with the Bloomberg Business App.
Listen on demand wherever you get your podcasts, or watch
us live on YouTube.
Speaker 2 (27:56):
The first real turnover, or at least shaking up of
the second Trump administration is he announced that his National
Security Advisor, Mike Walts, who of course was embroiled in
the signal Gate scandal after his inadvertent addition of a
journalist to a chat that discussed who the attack plans,
is now the nominee to be Ambassador to the United Nations,
leading many to question the other person who was operative
(28:19):
in that signal Gate scandal, the Defense Secretary Pete Hegseth,
who actually texted the plans of the fighter jets the
weapons that would be used to strike the houthis and
what would happen to him? And it's something we had
a chance to ask Mikey Cheryl about earlier. She's a
Democratic congressman from New Jersey, also gubernatorial candidate in New
Jersey and happens to be a former Navy helicopter pilot
and sit on the Armed Services Committee.
Speaker 6 (28:40):
And this is what she said when we asked about
the Defense.
Speaker 10 (28:43):
Secretary Pete haig Seth needs to be fired. He is
somebody that has obviously given classified information out over signal,
which is not a classified platform and almost an explicable
He wasn't just done that text chain we're all aware
(29:03):
of with Mike Waltz. He was also on a separate
text chain with his wife and his brother, among other people.
So this is an infraction that would get a junior
pettiofficer court martialed. Certainly the Secretary of Defense needs to
be fired for this.
Speaker 4 (29:18):
You were backing an amendment to prevent the Secretary of
Defense from destroying records and historical artifacts at the Pentagon
and in our Service Academy's congresswoman. You said in a
recent Armed Services Committee meeting that he's taken why the
cage Bird Sings by Maya Angelou off library shells, but
left two copies of Adolf Hitler's mind KOMF Does this
amendment have the support to pass?
Speaker 10 (29:41):
Unfortunately we did not see that support in the House
Armed Services hearing that we held on it. Again, this
does not seem controversial to me. This erasure of history
of the service, particularly of black service members and women,
is on a front. I went to the Naval Academy,
(30:02):
I served for almost ten years as a helicopter pilot,
as a Russian policy officer, and I will tell you
the idea that somehow service women should not be there
is just infuriating when we have seen such brave and
great service from so many women, like our former cno
who is one of the first admirals fired by this administration,
(30:25):
and others. So at this point, I am just really
convinced that Pete Hegseth is a real cancer on the
military and certainly needs to be fired.
Speaker 2 (30:40):
As we consider the defense posture of the United States,
Congressman President Trump today is requesting a record one trillion
dollar national security budget. Is that level of spending justified
in the next fiscal year?
Speaker 10 (30:54):
Well, I don't think we saw the one hundred and
fifty billion dollar supplemental well justified because we didn't have
the safeguards in place as to where it would go.
We in the hearing tried to make sure that we
understood exactly what was being funded. There wasn't a lot
of clarity, and there weren't enough guardrails. So simply dumping
(31:17):
one hundred and fifty billion dollars much less at trillion
dollars onto this Pentagon when we have a Secretary of
Defense that has proven to be very incompetent, many of
the top leaders having resigned. You know, at this point,
we don't have a new chief of Naval Operations. I'm
(31:39):
not sure anybody at this point wants that job because
of the chaos that we're seeing at the top in
the Pentagon. So we really, I think, have a lot
of concerns. I have a lot of concerns as a
member of the House Armed Services Committee about what the
proposals are in this budget and what they will be funding.
Speaker 4 (31:58):
Well, it becomes a question as well of what is
we're spending this money on, regardless of the spending level. Congresswoman,
I know this is a debate that you're involved in
on Armed Services. There was reporting recently that Elon Musk
actually advised Secretary Hegseth on procurement that we should be
spending less money on the weapons systems and platforms of
(32:18):
the Cold War and investing more in drones and hypersonic missiles.
Is he right?
Speaker 10 (32:24):
I think that there's some truth in there. I think
what we saw, especially as we watched Ukraine, we saw
how important some of these drones and new technologies are.
I think the procurement process at the Pentagon is something
that I've been very concerned about for years, and I
think we can do a lot better. My concern though,
(32:45):
with somebody like Elon Musk advising this is the debacle
that he's created with the DOGE process, which has not
been thoughtful at all, which has actually fired a lot
of people that are critical to the running of our country,
people like air traffic controllers or people at the FDA
or the NIH. So I would be very concerned about
(33:10):
having Elon Musk run this process. And that's why at
the hearing we just had in Armed Services, we wanted
to understand what Doge was doing in the military. We've
got no clarity on that, which is just once again
related to my concerns about what's going on in the Pentagon,
especially under Secretary Higgseth.
Speaker 2 (33:30):
Congressman, I'd like to ask you as well about the
budget reconciliation process that is well underway on Capitol Hill.
Though it is kind of one party only, Democrats don't
really seem to be playing a role here. But I
wonder when you consider your constituents at home in New Jersey,
if you still think they might actually be net beneficiaries
of this ultimate tax package, if it is to include
(33:50):
a lifting of the salt cap.
Speaker 10 (33:53):
I think overall they will probably lose out because what
we're seeing is a six trillion dollar addition to the deficit,
higher than anything we saw under the Inflation Reduction Act
or the Bipartisan Infrastructure Law and the Cares Act combined,
and in fact, this huge increase of the deficit well
(34:15):
at the same time not funding some of the really
basic priorities of our state. One in three children use
Medicaid as their insurance. Many of our nursing homes use
Medicaid to care for people at the end of their life.
Many families are relying on that nursing home care for
their loved ones. So we also see these hits to
the Department of Education and the Title I funding a
(34:38):
lot of funding that goes to the disabled community. I
hear from that community quite often about what the future
holds for them. And then at the same time, beyond
just what we're seeing in reconcilation, we're seeing these huge
hits to the economy of New Jersey that are ongoing
because of the terror regime and the chaos coming out
of Washington. So I'm hearing from everyone from a coffee
(35:00):
shop in my town saying costs are going to go up,
to a builder in my area saying I've stopped all
my projects because HVAC systems are going up thirty to
forty percent. And then as concerning we're seeing the world
community is becoming really infuriated by the destabilization of the
world economy by the United States. So we're hearing Canadian
(35:22):
tourists are not going to come down the shore this summer,
which is going to be a huge hit to our economy.
We're also hearing from you manufacturers that I was talking
to one manufacturer saying, look, I had these orders from Germany.
They just called me to cancel the orders to say
they're not buying American anymore. So I'm not just concerned
(35:43):
about the short term consequences here, but some of the
long term consequences that we're seeing on the ground in
New Jersey.
Speaker 4 (35:49):
Well, we've spent the better part of this conversation talking
about the changing political realities here in Washington, and of
course there are national implications. If you become the next
governor of New Jersey, to what extent will you be
able to balance what's coming from Washington in the state
of New Jersey or is this Donald Trump's world?
Speaker 10 (36:09):
No, this is why I'm running for governor because I
think we can take a very different path forward in
New Jersey. We have so much opportunity in this state.
I think building houses so we can drive down housing costs,
making sure we're planning for utilities, because I firmly believe
that the state that can drive down utility costs and
produce the power of the future while driving down carbon
(36:31):
emissions is the state that is going to own the
innovation of the future. Investing in our broken healthcare system
and rethinking how we're delivering care to millions of people,
I think there is such an incredible amount of opportunity
here to show a different and distinct path away from
what we see coming out of Washington. What we see
(36:52):
is the attacks on the economy and the attacks on opportunity,
the attacks on just rights and freedom coming from Washington.
D C stand in the breach as New Jersey with
a different path forward, which I think is going to
be really.
Speaker 4 (37:05):
Compelling, fascinating conversation with the congresswoman, also a gubernatorial candidate.
Speaker 1 (37:12):
As you just heard, you're listening to the Bloomberg Balance
of Power podcast. Catch us live weekdays at noon and
five pm Eastern on Apple Cockley 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 played Bloomberg eleven thirty.
Speaker 4 (37:34):
Quite the rise in the markets here following that headline
of less than an hour ago coming from the Wall
Street Journal about an overture from Beijing when it comes
to trade, one of the President's most important issues, not
just trade in terrace, but also fentanel maybe an off
ramp here from China. According to the Wall Street Journal,
(37:54):
Wall Street is not waiting around to find out with
new highs for the day with us now a little
bit earlier than usual is my partner Kayley Lines here
on Balance of Power for an important conversation that we're
going to have with Mallory McMorrow. It's been an interesting
day here in news though, coming off the date of
this morning the news from China, maybe we'll get some
more clarity on this. I think it was Kevin Hassett
(38:17):
yesterday who said there was trade news coming. We didn't
get it yesterday, but that doesn't mean it can't happen
on Friday.
Speaker 2 (38:22):
Yeah, so they keep us waiting, And of course this
news from the Journal comes after the Chinese Ministry of
Commerce signal that it is evaluating whether or not to
open talks with the United States on trade overall. But
the fact that this reporting suggests they're looking at fentanyl
specifically speaks to the very myriad range of issues that
the US is using tariffs to address with China. It
(38:42):
is not just about their over capacity in terms of
supplying the global markets and what he sees is a
way too large trade deficit. It's also about things like fentanyl,
and as we always have it's a question of how
much tariffs are intended to address those issues or how
much it is about on shoring US manufacturing American workers,
because that was the argument, of course, he was making
(39:03):
as he celebrated one hundred days in office in Michigan
last week.
Speaker 4 (39:06):
That's right. Well, it brings us to the dichotomy that
we were talking about a little bit earlier this hour,
and Michigan is a great example of that when it
comes to auto tariffs, for instance, in the C suites,
and we've heard from Mary Barrow, we've heard from the
executives at all of the major US automakers. Jim Farley
certainly had strong feelings about tariffs. This is a massive
disruption in their supply chains and potentially in their business.
(39:29):
They're pulling guidance. But when you talk to auto workers
on the manufacturing floor, they love this idea and many
of them voted for Donald Trump.
Speaker 6 (39:38):
Yeah, that's right.
Speaker 2 (39:38):
Sean Fain, who leads the United Auto Workers, has been
wholly supportive of the idea of auto tariffs specifically. And
it becomes a question of is it something that is
different for the companies than it is for the workers
who are actually putting together these cars, And of course
that is a key constituency in states like Michigan.
Speaker 4 (39:56):
Well, this is the backdrop for our conversation that we've
been looking for or to and telling you about. Mallory
mcmorro is with US Democratic Michigan State senator and now
a candidate for US Senate, having been framed repeatedly as
a rising star in the Democratic Party. Mallory McMorrow, Welcome
to Bloomberg. It's great to have you with us as
we have this conversation about trade and tariff specific to Michigan.
(40:20):
Just want to ask you more broadly. This past election
saw Michigan elect Eliza Slotkin and Donald Trump on the
same ballot. When we consider the message that you're honing
now as a new generation on the campaign trail, what
is it that national Democrats misunderstand about your state.
Speaker 11 (40:40):
Michiganders are fiercely independent, and it's so great to be
with both of you to share a little bit more
of why this is a state that in the nineteen
eighties had five of the top ten metro regions in
the entire country for median household income. So this idea
of this vision of make America great again, I think
compelling to a lot of Michiganders who remember vividly when
(41:04):
we were the most prosperous state in the country, and
there is a longing to recapture that prosperity, and the
question is how so. I think that is a reason
why many Michiganders may have voted for Donald Trump, but
also see the appeal in somebody like Alissa Slotkin, somebody
who is no BS. She will tell it to you straight.
(41:27):
She brings a strong national security background with her work
in the CIA, and I think a lot of Michiganders
respect the fact that Alissa served under both Presidents Bush
and Obama. In a moment where we see nothing but division,
people want to see their elected leaders work together. So
my campaign is really centered on this idea of making
(41:50):
a new American dream, acknowledging that we can't recreate the
prosperity of our past by going backwards and leaning into
my own story. I'm a millennial who graduated right into
the recession. I had no job prospects, I had no
health insurance. I lived in the back of my car
for a few nights, applied to three hundred jobs. And
I talked to michigan ors across this state who share
(42:11):
that sentiment and frustration of having done everything right and
still feeling like they're behind and they're not getting ahead,
and they don't have stability. So this is going to
be about three things, success, safety, and sanity, and writing
that new American dream together in a way that people
can see themselves in. That isn't just about Donald Trump.
(42:32):
It's not about, you know, relitigating what he's doing or
not doing. It's about what our future looks like.
Speaker 2 (42:39):
Well, and we do want to get into the fact
that you are a millennial and kind of the generational
question now at play with the Democratic Party and what
you might represent. But to touch back on your point
around prosperity and what it will take to return it.
For those who were gathered at the rally in Macomb
County earlier this week, as Donald Trump talked about the
Reagan Democrats and the auto workers who he thinks his
policies will benefit, what is your message to that particular
(43:02):
part of Michigan's constituency that you are seeking to represent,
who feel like these policies actually would serve to benefit them.
Speaker 11 (43:10):
There is a world where a thoughtful trade policy, thoughtful
tariff policy could do things like bring a third or
fourth shift back on some of our manufacturing facilities that
have laid workers off or have idled. But what we're
seeing now is the broad expansive tariffs that went on
after the announcement of the auto tariffs on everyday goods
(43:32):
from clothes to coffee to bananas to diapers is going
to devastate workers. So the approach that I have that
I hope michiganders here is that we have to be
thoughtful as we put policy forward and not have this
approach that I think we've seen out of the Trump
administration of ready fire aim of let's just announce things,
(43:53):
see how they go. And I think Michigan really, for
the rest of the country is a canary in the
coal mine. We saw some strong jobs numbers come out
this morning. However, Michigan has the second highest increase in
unemployment in the entire country or unemployment rate is sitting
right now around five point five percent. We've seen layoffs
at stalantis, at suppliers, at small business owners, and we
(44:17):
see that ripple effect play out where you know, over
in Long Beach, the longshorem and put out a really critical,
strong letter about the impact that this is going to
have to jobs in the economy. If we don't see
some measuring in the approach to tariff policy. So I
am heartened by some of the news out of Beijing
(44:38):
that you just mentioned, but we're going to have to
see some stability and not the chaos that we've seen
so far.
Speaker 4 (44:45):
There's a question about whether it's to engage right now.
James Carvel would say Democrats should hibernate, give Trump the rope.
Governor Gretchen Whitmer was criticized, as I'm sure you saw,
by a lot of Democrats for coming to Washington to
meet with President Trump. There was a bit of an
awkward Oval Office appearance. But then days later we learned
that Selfridge Air Base would get a new fighter wing,
(45:05):
which she lobbied for. So is your governor actually the
smartest one in the room?
Speaker 11 (45:11):
I think what people want to see right now is
that you know not only how to fight, but when
to fight and when not to fight. Governor Whitmer is
in one of the most difficult positions that I think
any governor is in in the country. We have seen
a president who is willing to carry out vengeance and
retribution on governors who dare to stand up to him.
(45:33):
We saw this with Governor Mills and Trump rescinding funding
from her state. So Governor Whitmer has a track record
of standing up strong against Donald Trump. But at the
end of the day, she has to protect and deliver
for Michigander. So she went out to that Oval Office
meeting to advocate for a new mission at Selfridge Air
(45:53):
Force Base in Macomb County, and we saw that come
to light last week and the end of the day,
what I'm hearing from Michiganders is that they are grateful
that she understands when to work with him, I think
when to work against him, maybe stand up to him.
She's not compromising her values. She's still a strong advocate
(46:15):
for reproductive rights, for women's rights, for voting rights, all
of the things that we need to stand up for.
But also knows that, you know, Selford Air Force Base
delivers eight hundred and eighty million dollars of economic activity
in southeast Michigan and in for our state. That is
essential for the success of our state. And she knew
the only way we were going to get that was
by meeting him, by flattering him, and she did that
(46:38):
and did it successfully.
Speaker 2 (46:41):
As you talk about values here, Mallory and the kind
of the values that do unite the Democratic Party. I
think we all also know that there are plenty of
fissures within the party itself, especially in the aftermath of
the twenty twenty four election and in the contested primary
in which you are competing, including against the incumbent Congressman
Hailey Stevens, for that Senate seat. Is that risk bringing
(47:01):
to light some of those deep fissures. And I wonder
what aspect what part of the Democratic Party you see
yourself representing here?
Speaker 11 (47:10):
You know, I don't think so. One of the things
that I believe has been frustrating for voters across the
political spectrum is feeling like the parties are making decisions
for them, that voters do not have a choice as
to which their preferred candidate is. I think that was
some of the frustration that I heard on the ground
(47:33):
in twenty twenty four from the Democratic Party. I think
Vice President Harris was put in a nearly impossible situation.
I think that she did an incredible job with the
one hundred days or so that she had to mount
a campaign. But I also heard from voters who said
that they really wanted to have a primary that if
President Biden was not going to seek the reelection or
(47:55):
was unable to that voters should decide. So I'm excited
about having a primary that is going to give Michiganders
the option, the ability to look at multiple candidates, look
at their platforms, look at their approach. My sense in
this moment to answer the second half of your question,
is that this is going to be an election decided
(48:17):
less by where a candidate falls in the political spectrum,
whether they are a progressive, moderate or somewhere in between,
and more about what their approach is. And that is
where I think I fit. I have been a very
pragmatic legislator here in the Michigan Senate. I came into
office flipping a Republican district in twenty eighteen. My predecessor
(48:40):
had won by fourteen points. I beat him by four
So we swung a district almost twenty points in the
first cycle. And I did that by appealing to a
lot of voters across Oakland County who saw me and
they said, you remind me a lot of my daughter
who left and went to Chicago or New York or Denver.
Why are you in Michigan and what can we do
to bring my kids back, and that is a value
(49:02):
that I think is universal, that Michigan should be a
place of opportunity and family, and that this should be
a place where people want to stay, invest, start a family,
buy a house. And that is the approach that I'm
taking into this election. That I feel like this is
less about re litigating maybe a twenty sixteen political fight
(49:22):
where you know, it's the Bernie wing versus the Hillary wing,
and people are looking for somebody who stands up and
communicates and believes that we have a future after the
Trump presidency, knows how to articulate what that is and
shows that they're willing to fight for Michiganders.
Speaker 2 (49:41):
All right, Mallory, we appreciate you joining us. Mallory Morrow
is a Democratic state senator in Michigan and of course
is candidate for a Senate seat in Michigan as well.
Speaker 6 (49:51):
Thank you for being.
Speaker 4 (49:51):
Here, Thanks for listening to the Balance of Power podcast.
Make sure to subscribe if you haven't all a ready
at Apple, Spotify, or wherever you get your podcasts, and
you can find us live every weekday from Washington, DC
at Noontimeeastern at Bloomberg dot com.
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