June 5, 2025 • 23 mins
Watch Joe and Kailey LIVE every day on YouTube: http://bit.ly/3vTiACF.
President Donald Trump proposed ending Elon Musk’s government contracts and subsidies, escalating the war of words between the world’s richest man and the president he helped elect.
“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!” Trump posted on his social media site Thursday.
Trump’s threat strikes at a main source of the billionaire’s wealth. Musk’s Tesla Inc. and Space Exploration Technologies Corp. have benefited from federal contracts and subsidies. Ending contracts with Musk’s companies could prove legally and practically unwieldy, given they are deeply intertwined with US space and defense operations.
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 Washington Correspondent Tyler Kendall.
- Bloomberg Politics Contributor Jeanne Sheehan Zaino and BGR Group International Practice Principal Lester Munson.
- Washington DC Mayor Muriel Bowser.
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Episode Transcript
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news. You're listening to the
Bloomberg Balance of Power podcast. Catch us live weekdays at
noon and five pm Eastern on Apple Coarckley and Android
Auto with the Bloomberg Business App. Listen on demand wherever
(00:20):
you get your podcasts, or watch us live on YouTube.
Speaker 2 (00:25):
Quite the bead today at the White House. Remembering at
the beginning of this administration, everybody was asking when Doge
was the conversation every day, how long will this last?
What would the falling out look like between Trump and Musk?
We were told it would never happen, and of course
we're watching it take place today. President Trump in the
Oval Office with the Chancellor of Germany saying that he's
(00:47):
surprised and disappointed with Elon Musk, who was tweeting in
real time back at the President We update this story
now with the help of Bloomberg's Tyler Kendall. She's been
watching it all unfold live at the White House.
Speaker 3 (01:00):
Tyler, Yeah, Hey, Joel, it's really starting to get personal
between President Trump and Elon Musk as they exchanged these barbs.
As you mentioned, it was pretty evident that Elon Musk
was watching in real time. And this really all started
with his criticism of that one big, beautiful bill and
how it will contribute to deficit spending. And as you're
about to hear, President Trump said that those claims took
(01:22):
him by surprise.
Speaker 2 (01:24):
I've always liked Elon and that's all.
Speaker 4 (01:26):
I was very surprised.
Speaker 2 (01:27):
You saw the words he had for me, the words,
and yes, had said anything about me, that's bad. I'd
rather have him criticized me than the bill, because the
bill is incredible. It's the biggest cut in the history
of our country.
Speaker 4 (01:40):
We've never cut. It's about one point six trillion in cuts. Now.
Speaker 3 (01:46):
The CBO says that the House plan that the Senators
currently working off of would add two point four trillion
dollars to the deficit over the next decade. And President
Trump also went on to say that this wasn't necessarily
about Musk's ultimate view when to how much is in
this bill, but also his view on how the bill
ultimately rolls back those clean energy tax credits. That's something
(02:09):
that Elon Musk kind of played down and did dispute,
even though our own reporting does indicate that Elon Musk
personally appealed to Mike Johnson asking him to save some
of those clean energy tax credits that would impact electric
vehicles such as Tesla. Also one other thing to point
out as this does continue to escalate, which is that
Elon Musk is saying that President Trump isn't showing gratitude,
(02:32):
alleging that he wouldn't have won the election without his help.
At Bloomberg News, we have calculated the numbers and Elon
Musk contributed more than two hundred and ninety million dollars
to the twenty twenty four election cycle. That's, of course
off based off of FEC Commission records. About two hundred
and fifty five million dollars of that Joe and Kelley
went towards President Trump's campaign, and likely the number is
(02:54):
even higher because that doesn't include super pac funding.
Speaker 5 (02:59):
All right, Bloomberg Tyler Kendall live at the White House
for us, Thank you so much, and we want to
get more into this fallout and turn to our political panel.
Genie Shanzo is with US Bloomber Politics contributor, democratic analyst
and senior Democracy Fellow at the Center for the Study
of the Presidency in Congress alongside Lester Monthson. Principle of
the international practice at BGR Group. Are Republican strategists today, Lester,
(03:20):
We don't need to debate whether or not President Trump
would have won this election without Elon Musk's financial assistance,
But there is a question about whether that financial assistance
will continue for Republicans in the cycles moving forward. Do
they need his money? Do they have reason for concern
in twenty twenty six and twenty twenty eight if Elon
Musk isn't going to be there.
Speaker 6 (03:40):
Well, it certainly would help to have his money. I
guess the question is going to be can the Republicans
find other donors to kind of replace those resources. It'll
be tough. Elon was no doubt a factor in the
election last year, both at the presidential level and in
other ways. However, he also showed in the Supreme Court
(04:03):
election in Wisconsin just a few weeks ago that that
spending is not dispositive. He can spend a lot of money,
He himself can be a divisive figure. There's a little
bit of a double edged sword here. So perhaps President
Trump and the Republicans might see some advantage to having
Elon Musk outside of the tent, although honestly, it's hard
(04:25):
to imagine I think on net it's better for them
to have him on the team.
Speaker 2 (04:30):
Genny. We've heard a lot from both of these men today,
the President and Elon Musk, and we should note that
Elon Musk is taking issue with the idea that he
missed his opportunity to say something in the White House.
The President said Elon knew the inner workings of the
bill better than almost anyone. Immediately, responding on Twitter, Musk
says false. This bill was never shown to me once
(04:51):
and was passed in the dead of night, so fast
that almost no one in Congress could read it. You
heard Donald Trump last out. We listened to this together Jeanie,
as he talked about what people experience emotionally when they
leave his administration. He said, at some point they miss
it so badly and some of them become hostile. I
don't know what it is, he said. I guess it's
(05:13):
Trump derangement syndrome. They become hostile. What's he talking himself
into here?
Speaker 4 (05:20):
He is diagnosing Joe Biden. He is diagnosing Elon Musk
now with Trump derangement syndrome. He is playing doctor. The
reality is for Donald Trump, this fight is not one
he needs or should have. And you know, I think
he tried to put it off with that lovely goodbye
ceremony we all watched in the White House, but obviously
(05:41):
it did not work. And you look at what has
happened in just the last few days, including allowing his
staff to replace the NASA administrator, so much of it
seemed focused on Elon Musk and some of the frustration
that seemed to be there. So I think he is
feeling that. And for the Trump administration, even if they
(06:05):
get this bill passed, if history is any guide, they're
going to have to sell it, and selling it is
going to be much harder with Elon Musk off the reservation.
So this is not just an issue of the astounding
money that Tyler was just talking about. It's also an
issue of the narrative. They've got to sell this thing,
difficult to do with somebody with a megaphone as big
(06:25):
as Elon Musk on the other side.
Speaker 5 (06:28):
Well, and when we consider the selling of this lester Republicans,
as part of their pitch for this one big, beautiful bill,
have basically said it's going to avoid a tax hike
what they describe as what would be the largest tax
hike in American history, But how much is that message
effective against messages of how much actually realistically could be cut,
(06:49):
The potential implications for Medicare, Medicaid SNAP programs, the impact
it could be felt in rural areas, is avoiding a
hike the same as feeling a cut.
Speaker 6 (07:00):
Well, I mean, that's going to be the question. Right
at the end of the day. The Republican Party is about,
is the party that cuts taxes? It is. It's a
little bit hypocritical. It always has been. On spending. The
Republican Party has never cut spending in the federal government.
Reagan didn't, the Bushes didn't. Trump certainly hasn't as much
(07:22):
as their rhetoric would have you indicate. That's why this
Doge Act, in Elon Musk's kind of presence in the administration,
was a little bit of a side show to the
real thing, which is, at the end of the day,
Republicans want to get government out of people's lives, lower taxes,
fewer regulations. So to that extent, this bill is going
to be very sellable if you can, if the Democrats
(07:45):
can effectively use the fearmonger button on budget deficits and
the debt question and maybe even some of these medicare cuts.
Maybe they'll have a chance next year, but right now
I actually think that even with the departure of Musk,
President Trump and the Republicans aren't fairly strong ground here.
It's certainly not a perfect bill, but it does a
lot of the things that the party has always advocated for.
Speaker 2 (08:07):
Genie, I want to ask you about something that would
normally be a pretty big story but was obscured by
this back and forth with Elon Musk, and that was
President Trump's announcement last night to investigate the prior administration
and in fact look into allegations that there was a
cover up of Joe Biden's mental acuity, and specifically he
talked about it today in the oval the use of
(08:28):
the auto pen, which he describes as the big scandal
of the last many years. He said, who is using it?
I think? I know. I'm not a big autopen person.
It's very dangerous. Usually when they put documents in front
of me, he said, they're important, I sign important documents,
suggesting the autopen should be reserved to sign letters from children,
(08:49):
which he says they receive thousands at the White House
every month. We only have a minute left. What's going
to happen with this investigation?
Speaker 4 (08:57):
Well, he's handed it off to the DOJ I know
ques question that they will look into it. But for
Donald Trump, this is very much of a distraction, everything
from the Joe Biden investigation to the travel band, to
the bandon international students on a Wednesday night at nine pm,
an effort to distract from what has burst out. Nonetheless,
despite all his efforts, is this riffed with Elon Musk
(09:20):
over this bill. Donald Trump needs to have a strong
economy and this bill is not going to get him there,
and the fight with Elon Musk is problematic for him.
Speaker 2 (09:31):
Genie Shanzino and Lester Munson. Great conversation, Thanks to both
of our panelists today, and stay with us straight ahead
on Bloomberg. Our conversation with the Mayor of Washington, D C.
Muriel Bowser joins us in studio on the fastest show
in politics, Some Bloomberg.
Speaker 1 (09:49):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm Eastern on Apple,
Cockway 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 2 (10:08):
We talked politics with a few plates to spend today
as we started this program inside the Oval Office and
a meeting between President Trump and the Chancellor of Germany.
The back and forth now between Trump and Elon Musk
sucking a lot of oxygen out of the room. But
we try to keep focused on policy here. That's the point.
That's why you listen to and watch Bloomberg. When we
(10:31):
talk about this reconciliation bill, which Elon Musk is disparaging
by the minute on Twitter. It's really boiled down to
three sticking points here, three important issues. Remembering that Republicans
from the Senate Finance Committee went to the White House
last evening, we talked to one of them, Roger Marshall,
on the late edition of Balance of Power, just as
he emerged from the White House. It's come down to
(10:53):
three big ones. The idea of permanence, we talked about
this yesterday, making permanent, the business tax cuts. Also some
limits they're talking about on some pretty key Trump priorities
like no tax on overtime as well these new savings accounts,
the Trump accounts as they've called them for kids. Also,
of course, the salt deduction, and we've heard this time
(11:15):
and again Senate Republicans want to change it significantly, and
that's a problem. If your name is Mike Johnson, the
Speaker of the House, talking early today on Bloomberg Surveillance
on Bloomberg TV and Radio about the delicate balance that
he's struck in the House, one that could be easily
disrupted by a change like that. Let's listen to Mike Johnson.
Speaker 7 (11:34):
Remember, it took us over a year to develop this
piece of legislation. We have eleven different committees in the House,
all the areas of jurisdiction that worked on the reconciliation
effort to reconcile the budget. And what we're going to
deliver here again is historic tax relief and savings. At
the same time. If we do not get this bill done,
the tax cuts of twenty seventeen, the tax cuts and
(11:57):
JOBZAC will expire at the end of decemberman will receive
the largest tax increase in US history, all at once.
It would be devastating for the economy. So we've addressed
that here. We've made the tax cuts permanent and we've
infused it with a pro growth series of policies that
will get the economy going again. It will be jet
fueled to the economy because we're going to reduce wasteful spending,
(12:18):
We're going to reduce taxes, and we're going to reduce
regulations as well. And that is what will allow job
creators and the energy sector and everyone else to get
going again.
Speaker 8 (12:26):
And your version of the bill, of course, increases the
salt deduction cap, which yesterday Senate Majority Leader John Thune said, quote,
there isn't a single Republican senator who cares much about
the salt issue. You and I both know you cannot
pass this bill without increasing the salt deduction cap. How
do you envision that deduction changing given the fact that
(12:46):
no senator, Republican senator wants a vote for this, Well.
Speaker 7 (12:52):
I appreciate that they don't. They all come from red states,
right as do I, and we have very different perspective
on salt than our college in the bluestays, for example,
in California and New York, in New Jersey. But that
is the reality in the House. Remembering and they have
to remember my senate friends and colleagues have to remember,
I have to deliver two hundred and seventeen votes to
(13:12):
get that thing across the line if they modify it.
So I had lunch with my Senate friends Tuesday, last
two weeks ago, before we passed the bill in the
House on that Thursday, and I encouraged them to modify
it as little as possible, right because I gave a metaphor.
I said, my friends, I am crossing the Grand Canyon
on a piece of dental flaws. Okay, the equilibrium that
we reached here took quite a bit of time to
(13:34):
get to where we are, and you can't load me
up on either side. And if you go and slash
the salt cap that we negotiated carefully for over a year,
it's going to make it very difficult for me to
deliver the necessary number of votes. Remembering I can only
lose three in the House. They can only lose three
in the Senate to get this done. So we're all
working together. It's one team, House and Senate together united
(13:55):
in this effort. They understand that, and I think they
understand certainly, and the leaders over there understand the complexity
of what we're having to deal with you speak.
Speaker 2 (14:03):
Of Johnson just sort of put a bow on it.
So forty thousands still likely to remain the cat.
Speaker 7 (14:09):
That's what we negotiated here, and I'm certainly trying to
hold to that number. And I look, we've paid for it.
I think we've got it worked out and all the
math and the legislation, and I think it's something that
I know they're not in love with it, but I
certainly hope they'll tolerate it so we can maintain our
vote tally over here.
Speaker 2 (14:26):
That's the Speaker of the House, Mike Johnson earlier today
on Bloomberg TV and Radio speaking with my colleagues on
Bloomberg Surveillance. Really interesting there when we consider the ability
to tip this boat with one single change, never mind
three major changes that could come out of the Senate
as it goes back to the House. Now. Of course,
we talk about congressional matters every day here, and the
budgeting process has been a big one. Remembering that one
(14:49):
major piece was left out of the budgeting process for
this fiscal year, and that has to do with the
District of Columbia. We talked about this the potential for teachers, firefighters,
police to be laid off, with the federal city effectively defunded.
It's a great pleasure to have the Mayor of Washington,
DC with us in studio today. Mario Bowser is with
(15:10):
us live on Bloomberg TV and Radio. Thanks for coming
to thank you, thanks for having me. I'd like to
start with you on this idea because we were talking
about extraordinary measures here, yes, just weeks ago. Yeah, you've
managed to avoid layoffs. Can you give me a sense
of the budget that you just dropped that makes up
for this shortfall and how did you manage to avoid
a crisis so far.
Speaker 9 (15:29):
Well, we spent a lot of time and unfortunately is
diverted attention that could be used for other things, our
upcoming budget, growing our city, our kids in school. But
the Congress in the most recent cr neglected to exclude
the district from limiting agencies to their f y twenty
(15:52):
four levels, which for us meant about one point one
billion dollars in reduce spending. And we worked very very
hard to use an authority that I have to expand
our budget by six percent and use some other funds
that we have that have automatic authority to reduce the
impact to just over three hundred million, but it still
(16:14):
meant that our ability to provide services has been impacted.
But we've been able to maintain our team teachers, police
offices in summer programming.
Speaker 2 (16:24):
You have assurances that this will be fixed.
Speaker 9 (16:27):
Well, I spoke to the speaker himself and he told
me that it wasn't a question of will, but scheduling.
And so now that they're back, we're going to hold
them to that because the district has been impacted by
federal changes, the changes by DOGE removing people from jobs,
shuttering offices is having a real negative impact on the
(16:51):
capital city. And so this three hundred million dollars, if
we can put that to work, then it will help
us shift with the economy.
Speaker 2 (17:01):
You just mentioned the layoffs here. According to the count
from your chief financial officer, forty thousand jobs were cut
on the federal level by DOGE. That's like having multiple
the equivalent of multiple neighborhoods all losing their jobs at
the same time. Yeah, so you've got a billion dollars
shortfall in the short run and a very real issue
(17:23):
for the long term. What does that mean for Washington,
DC's economy.
Speaker 9 (17:25):
What it means is we have to shift and shift fast.
But I think that the President in Congress can stop
with this, They can pause this. The courts are continue
to work on issues of fairness related to separations and
making sure they're all legally done. But I think the
American people expect their lawmakers and the president to say,
(17:47):
what are these changes doing to our agencies? How is
it affecting veterans? How is it affecting people who use
Social Security? And certainly is having impacts on local governments
all across the US, and especially US in this region
and not just DC, but DC, Maryland and Virginia. We'll
see changes to how we can run our cities because
(18:10):
of the negative impact on our budgets.
Speaker 2 (18:12):
With the conversations you're having, like now with the White House,
the President talks about how dirty the city is, how
it's time to clean it up, and so forth. But
we remember, you learn a lot of lessons in the
first Trump administration. A lot of inc has been spilled
on the way that you've managed to manage this relationship.
All Trump, how would you describe it? Well?
Speaker 9 (18:30):
I think that President Trump left d C during COVID,
which cities were ravaged by COVID homelessness, to increases in
crime with lack of services because government agencies were shuttered.
And we've worked very hard to get that image out
of his mind because that's not the DC of today.
(18:50):
In fact, we've driven down crime to a thirty year low.
Our tourism recovered in twenty twenty four. Our kids were
the fast is back to school, and our school population
has rebounded. An investment in DC. People are looking hard
at us because of some of the changes we're making
(19:11):
in our business environment. We are lowering taxes, we are
cutting red tape, and we are incentivizing good businesses to
start here, grow here, and hire DC residents.
Speaker 2 (19:22):
Do you feel like you have a partner in the
White House or an obstacle?
Speaker 9 (19:25):
Well, as a partnership we work on every day. Certainly,
the President has an outsized influence over the city of
Washington because it's the nation's capital. So we like him
to make some bigger investments like Union Station and continuing
to be a partner and developing RFK, helping us retool
(19:45):
and reskal our workers, and asking him to pause on
these separations and rehire qualified people.
Speaker 2 (19:52):
I know you made an important hire on rehabing Union Station,
which is something that we all look forward to those
of us who use it all the time. Good the
President's station, big parade, though, First, is the city ready
for it? This idea of tanks rolling down the street,
that's not really going to happen, is it.
Speaker 9 (20:05):
Well, they're going to have a lot of big equipment
from the air in on the ground, and it's the
celebration of the Army's two hundred and fiftieth anniversary. The
President has designated it a national Special Security event. So
the Secret Service and the National Park Service are the
lead agencies, and my agencies will be there to support it.
Speaker 2 (20:25):
Is there going to be repaving that follows this thing?
Or can you actually keep this within the bounds of
what the city are.
Speaker 9 (20:31):
Our hopes are that the Army, you know, they're a
big logistical agency, that they know how to move the
vehicles in the right way. I know that they have
allocated funds if street repair is necessary.
Speaker 2 (20:47):
Okay, this is going to be quite a day. It's
the fourteenth, right.
Speaker 9 (20:50):
It's June the fourteenth, Army two fifty.
Speaker 2 (20:52):
All right, we'll be here for it. Of course, you've
got a big stadium deal to work on. Yes, three
what seven billion dollars. The Washington Commanders back to Washington,
and it's a big deal for the city as well.
When you talk about the post COVID era chapter for Washington.
The city Council's got some issues on the amount of
taxpayer funding, also the fact that the team wouldn't be
(21:12):
paying rent to the city. How do you get around it.
Speaker 9 (21:15):
Oh, we'll get around it. The Washington Commanders back home
is a top priority for the residents of the district.
We secured one hundred and eighty acres from the National
Park Service at the end of December. The team will
bring two point seven billion dollars in private investment to
(21:37):
kickstart that project. There will be housing, hotels, entertainment, recreation,
activating a very important part of Washington, DC. So we'll
get it done. It's a big part of my budget
proposal that the council was working on right now, and
it will generate jobs and tax revenue for us to
(21:59):
invest in all eight wards of Washington d C.
Speaker 2 (22:01):
Maybe that's part of an answer to some of the
federal layoffs that we were just talking about. You're friends
with Daniel Lurie, the mayor of San Francisco.
Speaker 9 (22:08):
I think i've met he.
Speaker 2 (22:09):
Was on Bloomberg a little earlier today. Great conversation. He
said he has more fun than other mayors and specifically
said he has more fun than the mayors of Sacramento
and Washington, d C. Can you have fun in Washington
in this political environment?
Speaker 5 (22:23):
Are you kidding?
Speaker 9 (22:24):
This is the best city in the world. We have
the best restaurants, arts, entertainment, culture, museums that are free,
the best metro system, and we have fun here.
Speaker 2 (22:36):
We have lots of fun.
Speaker 9 (22:37):
San Francisco is a great town too, well it is
you can have fun there.
Speaker 2 (22:41):
I think people misunderstand Washington. I've been here for a
lot of years of my life, and I wish that
a lot more people would go beyond the mall and
meet the people who are who live in Washington and
who are from here, because it's a beautiful city. And
I'm glad that you could be with us today.
Speaker 9 (22:54):
Thank you, Thanks for having us, Thank you.
Speaker 2 (22:55):
About live in Washington. On Balance and Power. We covered
a lot of ground today, from the White House here
to the Federal City itself, and I'm glad that you
could spend some time with us here at Thanks for
listening to the Balance of Power podcasts. Make sure to
subscribe if you haven't already an Apple, Spotify, or wherever
you get your podcasts, and you can find us live
(23:16):
every weekday from Washington, DC at noontime Eastern at Bloomberg
dot com
Bloomberg Audio Studios, podcasts, radio news. You're listening to the
Bloomberg Balance of Power podcast. Catch us live weekdays at
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Auto with the Bloomberg Business App. Listen on demand wherever
(00:20):
you get your podcasts, or watch us live on YouTube.
Speaker 2 (00:25):
Quite the bead today at the White House. Remembering at
the beginning of this administration, everybody was asking when Doge
was the conversation every day, how long will this last?
What would the falling out look like between Trump and Musk?
We were told it would never happen, and of course
we're watching it take place today. President Trump in the
Oval Office with the Chancellor of Germany saying that he's
(00:47):
surprised and disappointed with Elon Musk, who was tweeting in
real time back at the President We update this story
now with the help of Bloomberg's Tyler Kendall. She's been
watching it all unfold live at the White House.
Speaker 3 (01:00):
Tyler, Yeah, Hey, Joel, it's really starting to get personal
between President Trump and Elon Musk as they exchanged these barbs.
As you mentioned, it was pretty evident that Elon Musk
was watching in real time. And this really all started
with his criticism of that one big, beautiful bill and
how it will contribute to deficit spending. And as you're
about to hear, President Trump said that those claims took
(01:22):
him by surprise.
Speaker 2 (01:24):
I've always liked Elon and that's all.
Speaker 4 (01:26):
I was very surprised.
Speaker 2 (01:27):
You saw the words he had for me, the words,
and yes, had said anything about me, that's bad. I'd
rather have him criticized me than the bill, because the
bill is incredible. It's the biggest cut in the history
of our country.
Speaker 4 (01:40):
We've never cut. It's about one point six trillion in cuts. Now.
Speaker 3 (01:46):
The CBO says that the House plan that the Senators
currently working off of would add two point four trillion
dollars to the deficit over the next decade. And President
Trump also went on to say that this wasn't necessarily
about Musk's ultimate view when to how much is in
this bill, but also his view on how the bill
ultimately rolls back those clean energy tax credits. That's something
(02:09):
that Elon Musk kind of played down and did dispute,
even though our own reporting does indicate that Elon Musk
personally appealed to Mike Johnson asking him to save some
of those clean energy tax credits that would impact electric
vehicles such as Tesla. Also one other thing to point
out as this does continue to escalate, which is that
Elon Musk is saying that President Trump isn't showing gratitude,
(02:32):
alleging that he wouldn't have won the election without his help.
At Bloomberg News, we have calculated the numbers and Elon
Musk contributed more than two hundred and ninety million dollars
to the twenty twenty four election cycle. That's, of course
off based off of FEC Commission records. About two hundred
and fifty five million dollars of that Joe and Kelley
went towards President Trump's campaign, and likely the number is
(02:54):
even higher because that doesn't include super pac funding.
Speaker 5 (02:59):
All right, Bloomberg Tyler Kendall live at the White House
for us, Thank you so much, and we want to
get more into this fallout and turn to our political panel.
Genie Shanzo is with US Bloomber Politics contributor, democratic analyst
and senior Democracy Fellow at the Center for the Study
of the Presidency in Congress alongside Lester Monthson. Principle of
the international practice at BGR Group. Are Republican strategists today, Lester,
(03:20):
We don't need to debate whether or not President Trump
would have won this election without Elon Musk's financial assistance,
But there is a question about whether that financial assistance
will continue for Republicans in the cycles moving forward. Do
they need his money? Do they have reason for concern
in twenty twenty six and twenty twenty eight if Elon
Musk isn't going to be there.
Speaker 6 (03:40):
Well, it certainly would help to have his money. I
guess the question is going to be can the Republicans
find other donors to kind of replace those resources. It'll
be tough. Elon was no doubt a factor in the
election last year, both at the presidential level and in
other ways. However, he also showed in the Supreme Court
(04:03):
election in Wisconsin just a few weeks ago that that
spending is not dispositive. He can spend a lot of money,
He himself can be a divisive figure. There's a little
bit of a double edged sword here. So perhaps President
Trump and the Republicans might see some advantage to having
Elon Musk outside of the tent, although honestly, it's hard
(04:25):
to imagine I think on net it's better for them
to have him on the team.
Speaker 2 (04:30):
Genny. We've heard a lot from both of these men today,
the President and Elon Musk, and we should note that
Elon Musk is taking issue with the idea that he
missed his opportunity to say something in the White House.
The President said Elon knew the inner workings of the
bill better than almost anyone. Immediately, responding on Twitter, Musk
says false. This bill was never shown to me once
(04:51):
and was passed in the dead of night, so fast
that almost no one in Congress could read it. You
heard Donald Trump last out. We listened to this together Jeanie,
as he talked about what people experience emotionally when they
leave his administration. He said, at some point they miss
it so badly and some of them become hostile. I
don't know what it is, he said. I guess it's
(05:13):
Trump derangement syndrome. They become hostile. What's he talking himself
into here?
Speaker 4 (05:20):
He is diagnosing Joe Biden. He is diagnosing Elon Musk
now with Trump derangement syndrome. He is playing doctor. The
reality is for Donald Trump, this fight is not one
he needs or should have. And you know, I think
he tried to put it off with that lovely goodbye
ceremony we all watched in the White House, but obviously
(05:41):
it did not work. And you look at what has
happened in just the last few days, including allowing his
staff to replace the NASA administrator, so much of it
seemed focused on Elon Musk and some of the frustration
that seemed to be there. So I think he is
feeling that. And for the Trump administration, even if they
(06:05):
get this bill passed, if history is any guide, they're
going to have to sell it, and selling it is
going to be much harder with Elon Musk off the reservation.
So this is not just an issue of the astounding
money that Tyler was just talking about. It's also an
issue of the narrative. They've got to sell this thing,
difficult to do with somebody with a megaphone as big
(06:25):
as Elon Musk on the other side.
Speaker 5 (06:28):
Well, and when we consider the selling of this lester Republicans,
as part of their pitch for this one big, beautiful bill,
have basically said it's going to avoid a tax hike
what they describe as what would be the largest tax
hike in American history, But how much is that message
effective against messages of how much actually realistically could be cut,
(06:49):
The potential implications for Medicare, Medicaid SNAP programs, the impact
it could be felt in rural areas, is avoiding a
hike the same as feeling a cut.
Speaker 6 (07:00):
Well, I mean, that's going to be the question. Right
at the end of the day. The Republican Party is about,
is the party that cuts taxes? It is. It's a
little bit hypocritical. It always has been. On spending. The
Republican Party has never cut spending in the federal government.
Reagan didn't, the Bushes didn't. Trump certainly hasn't as much
(07:22):
as their rhetoric would have you indicate. That's why this
Doge Act, in Elon Musk's kind of presence in the administration,
was a little bit of a side show to the
real thing, which is, at the end of the day,
Republicans want to get government out of people's lives, lower taxes,
fewer regulations. So to that extent, this bill is going
to be very sellable if you can, if the Democrats
(07:45):
can effectively use the fearmonger button on budget deficits and
the debt question and maybe even some of these medicare cuts.
Maybe they'll have a chance next year, but right now
I actually think that even with the departure of Musk,
President Trump and the Republicans aren't fairly strong ground here.
It's certainly not a perfect bill, but it does a
lot of the things that the party has always advocated for.
Speaker 2 (08:07):
Genie, I want to ask you about something that would
normally be a pretty big story but was obscured by
this back and forth with Elon Musk, and that was
President Trump's announcement last night to investigate the prior administration
and in fact look into allegations that there was a
cover up of Joe Biden's mental acuity, and specifically he
talked about it today in the oval the use of
(08:28):
the auto pen, which he describes as the big scandal
of the last many years. He said, who is using it?
I think? I know. I'm not a big autopen person.
It's very dangerous. Usually when they put documents in front
of me, he said, they're important, I sign important documents,
suggesting the autopen should be reserved to sign letters from children,
(08:49):
which he says they receive thousands at the White House
every month. We only have a minute left. What's going
to happen with this investigation?
Speaker 4 (08:57):
Well, he's handed it off to the DOJ I know
ques question that they will look into it. But for
Donald Trump, this is very much of a distraction, everything
from the Joe Biden investigation to the travel band, to
the bandon international students on a Wednesday night at nine pm,
an effort to distract from what has burst out. Nonetheless,
despite all his efforts, is this riffed with Elon Musk
(09:20):
over this bill. Donald Trump needs to have a strong
economy and this bill is not going to get him there,
and the fight with Elon Musk is problematic for him.
Speaker 2 (09:31):
Genie Shanzino and Lester Munson. Great conversation, Thanks to both
of our panelists today, and stay with us straight ahead
on Bloomberg. Our conversation with the Mayor of Washington, D C.
Muriel Bowser joins us in studio on the fastest show
in politics, Some Bloomberg.
Speaker 1 (09:49):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm Eastern on Apple,
Cockway 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 2 (10:08):
We talked politics with a few plates to spend today
as we started this program inside the Oval Office and
a meeting between President Trump and the Chancellor of Germany.
The back and forth now between Trump and Elon Musk
sucking a lot of oxygen out of the room. But
we try to keep focused on policy here. That's the point.
That's why you listen to and watch Bloomberg. When we
(10:31):
talk about this reconciliation bill, which Elon Musk is disparaging
by the minute on Twitter. It's really boiled down to
three sticking points here, three important issues. Remembering that Republicans
from the Senate Finance Committee went to the White House
last evening, we talked to one of them, Roger Marshall,
on the late edition of Balance of Power, just as
he emerged from the White House. It's come down to
(10:53):
three big ones. The idea of permanence, we talked about
this yesterday, making permanent, the business tax cuts. Also some
limits they're talking about on some pretty key Trump priorities
like no tax on overtime as well these new savings accounts,
the Trump accounts as they've called them for kids. Also,
of course, the salt deduction, and we've heard this time
(11:15):
and again Senate Republicans want to change it significantly, and
that's a problem. If your name is Mike Johnson, the
Speaker of the House, talking early today on Bloomberg Surveillance
on Bloomberg TV and Radio about the delicate balance that
he's struck in the House, one that could be easily
disrupted by a change like that. Let's listen to Mike Johnson.
Speaker 7 (11:34):
Remember, it took us over a year to develop this
piece of legislation. We have eleven different committees in the House,
all the areas of jurisdiction that worked on the reconciliation
effort to reconcile the budget. And what we're going to
deliver here again is historic tax relief and savings. At
the same time. If we do not get this bill done,
the tax cuts of twenty seventeen, the tax cuts and
(11:57):
JOBZAC will expire at the end of decemberman will receive
the largest tax increase in US history, all at once.
It would be devastating for the economy. So we've addressed
that here. We've made the tax cuts permanent and we've
infused it with a pro growth series of policies that
will get the economy going again. It will be jet
fueled to the economy because we're going to reduce wasteful spending,
(12:18):
We're going to reduce taxes, and we're going to reduce
regulations as well. And that is what will allow job
creators and the energy sector and everyone else to get
going again.
Speaker 8 (12:26):
And your version of the bill, of course, increases the
salt deduction cap, which yesterday Senate Majority Leader John Thune said, quote,
there isn't a single Republican senator who cares much about
the salt issue. You and I both know you cannot
pass this bill without increasing the salt deduction cap. How
do you envision that deduction changing given the fact that
(12:46):
no senator, Republican senator wants a vote for this, Well.
Speaker 7 (12:52):
I appreciate that they don't. They all come from red states,
right as do I, and we have very different perspective
on salt than our college in the bluestays, for example,
in California and New York, in New Jersey. But that
is the reality in the House. Remembering and they have
to remember my senate friends and colleagues have to remember,
I have to deliver two hundred and seventeen votes to
(13:12):
get that thing across the line if they modify it.
So I had lunch with my Senate friends Tuesday, last
two weeks ago, before we passed the bill in the
House on that Thursday, and I encouraged them to modify
it as little as possible, right because I gave a metaphor.
I said, my friends, I am crossing the Grand Canyon
on a piece of dental flaws. Okay, the equilibrium that
we reached here took quite a bit of time to
(13:34):
get to where we are, and you can't load me
up on either side. And if you go and slash
the salt cap that we negotiated carefully for over a year,
it's going to make it very difficult for me to
deliver the necessary number of votes. Remembering I can only
lose three in the House. They can only lose three
in the Senate to get this done. So we're all
working together. It's one team, House and Senate together united
(13:55):
in this effort. They understand that, and I think they
understand certainly, and the leaders over there understand the complexity
of what we're having to deal with you speak.
Speaker 2 (14:03):
Of Johnson just sort of put a bow on it.
So forty thousands still likely to remain the cat.
Speaker 7 (14:09):
That's what we negotiated here, and I'm certainly trying to
hold to that number. And I look, we've paid for it.
I think we've got it worked out and all the
math and the legislation, and I think it's something that
I know they're not in love with it, but I
certainly hope they'll tolerate it so we can maintain our
vote tally over here.
Speaker 2 (14:26):
That's the Speaker of the House, Mike Johnson earlier today
on Bloomberg TV and Radio speaking with my colleagues on
Bloomberg Surveillance. Really interesting there when we consider the ability
to tip this boat with one single change, never mind
three major changes that could come out of the Senate
as it goes back to the House. Now. Of course,
we talk about congressional matters every day here, and the
budgeting process has been a big one. Remembering that one
(14:49):
major piece was left out of the budgeting process for
this fiscal year, and that has to do with the
District of Columbia. We talked about this the potential for teachers, firefighters,
police to be laid off, with the federal city effectively defunded.
It's a great pleasure to have the Mayor of Washington,
DC with us in studio today. Mario Bowser is with
(15:10):
us live on Bloomberg TV and Radio. Thanks for coming
to thank you, thanks for having me. I'd like to
start with you on this idea because we were talking
about extraordinary measures here, yes, just weeks ago. Yeah, you've
managed to avoid layoffs. Can you give me a sense
of the budget that you just dropped that makes up
for this shortfall and how did you manage to avoid
a crisis so far.
Speaker 9 (15:29):
Well, we spent a lot of time and unfortunately is
diverted attention that could be used for other things, our
upcoming budget, growing our city, our kids in school. But
the Congress in the most recent cr neglected to exclude
the district from limiting agencies to their f y twenty
(15:52):
four levels, which for us meant about one point one
billion dollars in reduce spending. And we worked very very
hard to use an authority that I have to expand
our budget by six percent and use some other funds
that we have that have automatic authority to reduce the
impact to just over three hundred million, but it still
(16:14):
meant that our ability to provide services has been impacted.
But we've been able to maintain our team teachers, police
offices in summer programming.
Speaker 2 (16:24):
You have assurances that this will be fixed.
Speaker 9 (16:27):
Well, I spoke to the speaker himself and he told
me that it wasn't a question of will, but scheduling.
And so now that they're back, we're going to hold
them to that because the district has been impacted by
federal changes, the changes by DOGE removing people from jobs,
shuttering offices is having a real negative impact on the
(16:51):
capital city. And so this three hundred million dollars, if
we can put that to work, then it will help
us shift with the economy.
Speaker 2 (17:01):
You just mentioned the layoffs here. According to the count
from your chief financial officer, forty thousand jobs were cut
on the federal level by DOGE. That's like having multiple
the equivalent of multiple neighborhoods all losing their jobs at
the same time. Yeah, so you've got a billion dollars
shortfall in the short run and a very real issue
(17:23):
for the long term. What does that mean for Washington,
DC's economy.
Speaker 9 (17:25):
What it means is we have to shift and shift fast.
But I think that the President in Congress can stop
with this, They can pause this. The courts are continue
to work on issues of fairness related to separations and
making sure they're all legally done. But I think the
American people expect their lawmakers and the president to say,
(17:47):
what are these changes doing to our agencies? How is
it affecting veterans? How is it affecting people who use
Social Security? And certainly is having impacts on local governments
all across the US, and especially US in this region
and not just DC, but DC, Maryland and Virginia. We'll
see changes to how we can run our cities because
(18:10):
of the negative impact on our budgets.
Speaker 2 (18:12):
With the conversations you're having, like now with the White House,
the President talks about how dirty the city is, how
it's time to clean it up, and so forth. But
we remember, you learn a lot of lessons in the
first Trump administration. A lot of inc has been spilled
on the way that you've managed to manage this relationship.
All Trump, how would you describe it? Well?
Speaker 9 (18:30):
I think that President Trump left d C during COVID,
which cities were ravaged by COVID homelessness, to increases in
crime with lack of services because government agencies were shuttered.
And we've worked very hard to get that image out
of his mind because that's not the DC of today.
(18:50):
In fact, we've driven down crime to a thirty year low.
Our tourism recovered in twenty twenty four. Our kids were
the fast is back to school, and our school population
has rebounded. An investment in DC. People are looking hard
at us because of some of the changes we're making
(19:11):
in our business environment. We are lowering taxes, we are
cutting red tape, and we are incentivizing good businesses to
start here, grow here, and hire DC residents.
Speaker 2 (19:22):
Do you feel like you have a partner in the
White House or an obstacle?
Speaker 9 (19:25):
Well, as a partnership we work on every day. Certainly,
the President has an outsized influence over the city of
Washington because it's the nation's capital. So we like him
to make some bigger investments like Union Station and continuing
to be a partner and developing RFK, helping us retool
(19:45):
and reskal our workers, and asking him to pause on
these separations and rehire qualified people.
Speaker 2 (19:52):
I know you made an important hire on rehabing Union Station,
which is something that we all look forward to those
of us who use it all the time. Good the
President's station, big parade, though, First, is the city ready
for it? This idea of tanks rolling down the street,
that's not really going to happen, is it.
Speaker 9 (20:05):
Well, they're going to have a lot of big equipment
from the air in on the ground, and it's the
celebration of the Army's two hundred and fiftieth anniversary. The
President has designated it a national Special Security event. So
the Secret Service and the National Park Service are the
lead agencies, and my agencies will be there to support it.
Speaker 2 (20:25):
Is there going to be repaving that follows this thing?
Or can you actually keep this within the bounds of
what the city are.
Speaker 9 (20:31):
Our hopes are that the Army, you know, they're a
big logistical agency, that they know how to move the
vehicles in the right way. I know that they have
allocated funds if street repair is necessary.
Speaker 2 (20:47):
Okay, this is going to be quite a day. It's
the fourteenth, right.
Speaker 9 (20:50):
It's June the fourteenth, Army two fifty.
Speaker 2 (20:52):
All right, we'll be here for it. Of course, you've
got a big stadium deal to work on. Yes, three
what seven billion dollars. The Washington Commanders back to Washington,
and it's a big deal for the city as well.
When you talk about the post COVID era chapter for Washington.
The city Council's got some issues on the amount of
taxpayer funding, also the fact that the team wouldn't be
(21:12):
paying rent to the city. How do you get around it.
Speaker 9 (21:15):
Oh, we'll get around it. The Washington Commanders back home
is a top priority for the residents of the district.
We secured one hundred and eighty acres from the National
Park Service at the end of December. The team will
bring two point seven billion dollars in private investment to
(21:37):
kickstart that project. There will be housing, hotels, entertainment, recreation,
activating a very important part of Washington, DC. So we'll
get it done. It's a big part of my budget
proposal that the council was working on right now, and
it will generate jobs and tax revenue for us to
(21:59):
invest in all eight wards of Washington d C.
Speaker 2 (22:01):
Maybe that's part of an answer to some of the
federal layoffs that we were just talking about. You're friends
with Daniel Lurie, the mayor of San Francisco.
Speaker 9 (22:08):
I think i've met he.
Speaker 2 (22:09):
Was on Bloomberg a little earlier today. Great conversation. He
said he has more fun than other mayors and specifically
said he has more fun than the mayors of Sacramento
and Washington, d C. Can you have fun in Washington
in this political environment?
Speaker 5 (22:23):
Are you kidding?
Speaker 9 (22:24):
This is the best city in the world. We have
the best restaurants, arts, entertainment, culture, museums that are free,
the best metro system, and we have fun here.
Speaker 2 (22:36):
We have lots of fun.
Speaker 9 (22:37):
San Francisco is a great town too, well it is
you can have fun there.
Speaker 2 (22:41):
I think people misunderstand Washington. I've been here for a
lot of years of my life, and I wish that
a lot more people would go beyond the mall and
meet the people who are who live in Washington and
who are from here, because it's a beautiful city. And
I'm glad that you could be with us today.
Speaker 9 (22:54):
Thank you, Thanks for having us, Thank you.
Speaker 2 (22:55):
About live in Washington. On Balance and Power. We covered
a lot of ground today, from the White House here
to the Federal City itself, and I'm glad that you
could spend some time with us here at Thanks for
listening to the Balance of Power podcasts. Make sure to
subscribe if you haven't already an Apple, Spotify, or wherever
you get your podcasts, and you can find us live
(23:16):
every weekday from Washington, DC at noontime Eastern at Bloomberg
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