June 2, 2025 • 28 mins
Watch Joe and Kailey LIVE every day on YouTube: http://bit.ly/3vTiACF.
Significant changes are in store for President Donald Trump’s signature $3.9 trillion tax-cut bill as the Senate begins closed-door talks this week on legislation that squeaked through the House by a single vote.
Senate Republican leaders are aiming to make permanent many of the temporary tax cuts in the House bill, a move that would increase the bill’s more than $2.5 trillion deficit impact. But doing so risks alienating fiscal hawks already at war with party moderates over the bill’s safety-net cuts.
It amounts to a game of chess further complicated by the top Senate rules-keeper, who will decide whether some key provisions violate the chamber’s strict rules. Jettisoning those provisions — which include gun silencer regulations and artificial intelligence policy — could sink the bill in the House.
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:
- Republican Congresswoman Lisa McClain of Michigan, Chairwoman of the House Republican Conference.
- S-3 Group Partner Ashley Davis and Iona University Professor Jeanne Sheehan Zaino.
- Stimson Center Senior Fellow Kelly Grieco.
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
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Speaker 2 (00:25):
Joe Matthew and myself, Kayley Lines, have returned to Washington
along with the majority of Congress after of course, the
Memorial Day recess. The Senate is flying in this afternoon,
this evening and are pretty quickly going to get to work,
at least behind closed doors, on figuring out what changes
they want to make to the House past big one,
big beautiful bill. Can't forget the one. Of course, it
(00:47):
passed in the House two fifteen to two fourteen. It
was very narrow, and the Speaker of the House has
warned the Senate, don't make too many changes if you
want me to be able to pass this thing.
Speaker 3 (00:55):
A second, we're still calling it OBA. That was a
thing for OBBA. Does that make it easy? I feel
like we worked off the O, but we're not doing
that anymore. I haven't been remember to build back better BBB.
That's dangerous. Ground. Yes, the President did talk about this
at the big rally, the one big rally on Friday
night outside of Pittsburgh. This is something that's very top
of mind for him. Right Let's listen.
Speaker 4 (01:14):
Right now, with the verge of passing the largest working
class tax cuts in American history, we got to get
that beautiful, big bill, beautiful, beautiful as it is, we
got to get it passed the Senate. Call you, senators
and I'll tell you have you have great people representing you,
with your senators, your congressman. You have great people. Every
(01:38):
single Democrat House member voted to impose the largest tax
hike in history. The Democrats are voting for the largest
highest tax hike in history. I've never heard of it before.
Speaker 3 (01:51):
Now, as this bill goes to the Senate, the big question,
of course, that we've been asking here on this program
and everyone's asking inside the nation's capital, is kind of
change will the Upper Chamber make and will that make
this more difficult to pass when it comes back in
the House. We actually have an opportunity to speak to
Republican leadership in the House to talk about that very question.
Speaker 5 (02:13):
Right now.
Speaker 3 (02:13):
Congressoman Lisa McLean is with us of Michigan's ninth District,
Chair of the House Republican Conference in studio, no less.
Speaker 6 (02:21):
Thanks for coming to see us, Thanks for having me.
Speaker 3 (02:23):
Are you getting the jitters? Now that Senators are flying
back into town? What are they going to do to.
Speaker 7 (02:26):
This thing's getting real? My hope is that they don't
do a lot right. We passed it very narrowly in
the House. We don't have a big margin. Obviously that's
no secret. So my hope is that they make very
very few changes, they send the bill back, and we
do get it passed by July fourth. The President Trump
has been very clear that that is his deadline, and
(02:49):
I'll tell you I wouldn't want to be the one
that stands in front in front of President Trump's deadline.
Speaker 2 (02:54):
Well, we know he's not afraid to get people on
the phone, even call them out publicly if necessary. But obviously,
your job is Republican Conference chair, is to talk to
the membership, get an understand of understanding of what their
deal breakers are. Knowing they were not shy about expressing
that during the process in the House. What is the
most potential deadly change the Senate can make to this bill?
Speaker 7 (03:16):
I hope they don't do many changes to reduce the
amount of savings, right. I think we've hit the sweet spot.
I don't believe they'll make many changes to Medicaid because again,
that was a very delicate balance and salt is obviously
very important. So I don't see a lot of changes
(03:38):
that they really can make. I know some of the
talk has been out there on you know, making sure
that we have coverage in the rural hospitals and whatnot,
which will make sure that we do. The bill is
pretty well crafted. And remember we'd been working on this
bill for almost nine months, so we've had our family fights,
so to speak, to get to the place that we're.
Speaker 8 (03:59):
At right now.
Speaker 3 (04:00):
What if it's in fact more cutting that comes from
the Senate, what do you tell Mike Crapo says, let's
make the Trump tax cuts permanent, make the cuts even deeper.
Would it pass the House when it came back.
Speaker 7 (04:11):
I think it would. I think it would, provided it
just doesn't go too far for a lot of our members.
Look at Speaker Johnson has a very small eye of
the needle that he needed to thread, and I think
he threaded that perfectly right. Some members like me that
are in a Ruby red districts. Wish we would have
been able to cut more, but I understand why we didn't,
(04:33):
and that's this balance. What I will remind everybody is
we need you know, everyone's talking about certainty, certainty, certainty.
That's why it's so critical that the Senate passed this
is it will give Americans the certainty that they've been
asking for, and I'm confident they will.
Speaker 2 (04:50):
Well, what do we consider what Americans will actually see
if and when this becomes law in terms of the
changes in their pocketbook. A lot of this is just
an extension of the tax rates they've currently been pay
That's the point the President was making. It's avoiding a
tax hike, not necessarily giving everyone a tax cut. Though,
how do you message that successfully as you look ahead
to twenty twenty six.
Speaker 7 (05:10):
Exactly what you said is we want to avoid the
largest tax increase then a lot of Americans will see
in their entire lifetime. Look at in Michigan, if we
do not pass this bill, over seven hundred thousand small
businesses in just Michigan will see their tax rate increase
(05:30):
to forty three percent. That is not good for the economy.
That is not good for michiganers. So we have to
make sure that we extend these tax cuts. And I
will remind you every single Democrat voted to raise the
American people's taxes. We're not for that.
Speaker 3 (05:46):
There's a question about the debt ceiling here, of course,
that's folded into this bill. Scott Bessett. Yesterday the Treasury
Secretary would not be specific about the X state, suggesting
that that might increase the urgency and the timeline and
getting this done. Is that a good strategy? Does that
actually motivate lawmakers?
Speaker 7 (06:02):
Well, I can share with you. I believe it does
motivate lawmakers.
Speaker 3 (06:06):
Let's put it on I'd say it's the fourth of August,
Congress women. We need to get it done by them.
Speaker 7 (06:10):
I think we don't have the exact date, or no
one can provide the exact date right now, but I
do know that it's sometime in the near future. So
let's put it in the one big, beautiful bill and
let's just deal with everything so we can get onto
the real business of Congress, which is the appropriations. Right,
we have to begin to pass our appropriations package.
Speaker 2 (06:31):
Well, the Senate may ultimately if it wants to make
a number of these cuts permanent or extend the duration
before we have another X date crisis on our hands.
Actually lift the amount of the debt sealing hike in
the package to five trillion from four trillion. Would that
be problematic or do you think that can be?
Speaker 7 (06:46):
You know, I think that will be a little bit
of problematic. Any tweak or adjustment that is made in
the Senate is not going to be an easy lift
for us because we spent all of the time already
having the internal fights and arguments, and you know, different
people representing their districts, so we really can't have a
(07:06):
lot of changes. It is not going to be positive
for the American people if we do that, it just
makes everybody's job way more difficult.
Speaker 3 (07:13):
There's been a lot of talk about Joni Ernstown hall experience,
which we're going to get into, and a little bit here.
I'm just wondering what you heard from your members who
went home, marched in parades, I guess in some cases
held town hall meetings. What was the point of concern
that they were hearing from voters.
Speaker 7 (07:26):
Yeah, well, I actually did a Memorial Day parade and
a more event and several other events, talked to business owners,
had a round table with my elected officials, et cetera,
et cetera, And what I heard in my district in
Michigan is a sense of optimism and hope because the
people in my state look at the tariffs and the
(07:48):
economy a little bit differently. And I say that because
Michigan ranks number three behind California in New York in
the amount of manufacturing jobs lost, So that is a
horror thing. What they see President Trump doing is bringing jobs,
especially manufacturing jobs, back to their state of Michigan. So
(08:09):
they are extremely excited and very optimistic with what's going
on in the economy right now.
Speaker 2 (08:14):
But are you not hearing from some of those manufacturers
that say, lifting steel and aluminum teriffs from twenty five
percent to fifty percent and therefore elevating input costs is
an issue.
Speaker 7 (08:24):
Yeah. To be fair, yes they are, but they're giving
the president some grace. They understand that tariffs are just
a tool in the toolbox to level the playing field,
so to speak. So what I'm hearing is, eh, there
is a little bit of all concern, but they do
trust his decision making on economics and economic policy because
(08:47):
he's done it before and in his first term. It
went really well for a lot of the businesses in
my community, and they're hopeful that we're going to get
this economy back on track.
Speaker 3 (08:56):
Well with that trepidation is they're also a conversation of
about pulling up the moving trucks and starting to move
manufacturing supply chains. Do they say, Congresswoman, give us give
us six to nine months because we're bringing it back
to Michigan. Is that how this ends?
Speaker 7 (09:10):
Yes, they are asking, just like they're giving the President
said grace. They're asking for a little bit of grace.
If they're showing progress moving facilities.
Speaker 8 (09:18):
Back, will we see that?
Speaker 7 (09:20):
You know, I'm confident. I don't want to get ahead
of the president. But what I can tell you about
President Trump is he's been very receptive to the American
worker in listening right, there are unintended consequences when we
do policy changes. He's very in tune with the American
worker and he wants to listen to what they're dealing
with in the American manufacturer and he will make changes
(09:43):
based upon that.
Speaker 2 (09:44):
All right, Chairwoman, great to have you, thanks with us
in our Washington, d C. Studio. The Chairwoman of the
House Republican Conference representing Michigan's ninth district, Lisa McClean with us.
Speaker 1 (09:56):
You're listening to the Bloomberg Balance of Power podcast. Catch
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played Bloomberg eleven thirty.
Speaker 2 (10:15):
We're in Washington, where we just wrapped up a conversation
with the chairwoman of the House Republican Conference, Lisa mcclan
and Joe made mentioned in our conversation with her about
the experience of Iowa Senator Joni Earns, the Republican who
held a town hall over the Memorial Day recess and
was actually pressed by a constituent and people who were
in attendance about the cuts to Medicaid and SNAP that
(10:37):
could potentially come if the one big beautiful bill indeeds
become lost, suggesting that people will die. This was the
senator's response.
Speaker 9 (10:47):
People are not, well, we all are going to die,
said spokes Okay, no, but but well, what you.
Speaker 3 (11:01):
Don't want to do is listen to me.
Speaker 5 (11:02):
When I say that we are going to focus on
those that are most vulnerable, those that made the eligibility
requirements for meta paid we will protect.
Speaker 3 (11:14):
Yes, you heard her say, well, we are all going
to die. Fast forward through the outrage many rounds on
social media, a bunch of campaign ads that Democrats are
making with that tape, to the response from Senator Joni Ernst,
who went all the way to an actual graveyard to
record a video that maybe we'll call a non apology.
Speaker 10 (11:35):
Listen, I would like to take this opportunity to sincerely
apologize for a statement that I made yesterday at my
town hall.
Speaker 8 (11:46):
See.
Speaker 10 (11:46):
I was in the process of answering a question that
had been asked by an audience member when a woman
who was extremely distraught screamed out from the back corner
of the auditorium people are going to die. And I
made an incorrect assumption that everyone in the auditorium understood that, yes,
(12:13):
we are all going to perish from this earth.
Speaker 2 (12:18):
So on that grim note, let's assemble our political panel today.
Jeanie Shanzino is a Wes S. Bloomberg politics contributor, democratic analyst,
and Tenior Democracy Fellow at the Center for the study
of the Presidency and Congress alongside Ashley Davis, Republican strategist
and partner at S three Group. Ashley, I'll come to
you on this one first. As the Republican at the table,
when you are being pressed on issues that actually do
(12:40):
affect people's health and health outcomes and suggest that we're
all going to die anyway, then kind of double down
in that fashion. Does this serve the Senator will does
it serve Republicans at large?
Speaker 6 (12:52):
Well, I knew you were coming to me first. I mean,
Senator Earns is a very serious member as sure, she's
been on the show and she she so I was
actually surprised with the response today. I do think that
from the initial town hall. These town halls are exhausting,
which is why most people are canceling theirs or they're
(13:13):
being told like because and we all know this, this
is not a political thing. They're being stacked with Democrats
to ask hard questions, which, by the way, Republicans would
do the exact same thing. So I mean, like, this
is not a political statement that I'm making, So I
thinks think they're exhausting. I think that probably the response
was a little bit worse than the actual mistake to
begin with, she could have just said, like, listen, that
(13:34):
was a little bit out of context or whatever. But
the doubling down, I mean, she's making a strategic decision
to do it. She knows what she's doing.
Speaker 3 (13:42):
So with a little bit of snark, Genie, I'm very
in touch with my own mortality, so I have to
be careful here. I can barely sleep through the night
with this kind of stuff. Is this actually great for Democrats?
Speaker 8 (13:54):
It is, you know, and Joe I think you know,
she woke us all up to the fact that we're
all gonna die. The reality is is that that it
was very strange. It fell flat. Obviously the cemetery walk.
People kept saying it was Ai. It was truly her.
And this is a woman who came to Washington making
(14:16):
her name with the Squealing Pigs commercial that was amazing,
talking about cutting pork, and yet she's doubling down on
cutting medicaid that impacts forty percent of young people children
in her district in her state rather and fifty percent
of seniors. And so it was strange because as you
(14:37):
listen to the rest of the town hall, she said
perfectly clearly that she understands how important Medicaid is, she
understands how important it is to her constituents. She could
have just said that and said what Mike Johnson said,
which is we're trying to cut people who are, you know,
playing the system essentially. Now, I don't agree with Mike Johnson,
(14:57):
nor do I give Jony Ernst tips, but I'm really
thinking she needs to go back and listen to his
Meet the Press interview because he explained it a lot
better than she did, and he certainly didn't say, oh,
don't worry, we're all going to die anyways.
Speaker 10 (15:11):
Well.
Speaker 2 (15:11):
I also wonder how some of her colleagues received this
or viewed this. Senators like Josh Holly, for example, or
Susan Collins, who have raised serious concerns about the cuts
to Medicaid, suggesting they may want to see a different
version through the Senate. Could this kind of episode give
more ammunition to that argument.
Speaker 5 (15:29):
I don't know.
Speaker 6 (15:30):
I mean, I think this is an issue that is
not going to impact It may impact her because we
have to remember, she's up in twenty twenty six, so
she doesn't have that long to lose this kind of statement,
and obviously the Democrats are going to make tons of
ads over it, But I don't know if it impacts
the broader bill. I think there's so many things happening
behind the scenes. We know that of just all the
(15:51):
different lovers to make sure that we at least don't
lose any more than three votes, and I don't think
this impacts it.
Speaker 5 (15:58):
Well.
Speaker 3 (15:58):
We just spoke with a member of Republican House leadership,
of course on the program, Genie and Congresswoman Maclain was
asking hoping maybe that the Senate not make any big
changes to this bill. But based on the conversations we
heard on Sunday morning and of course throughout the week
last week, that's just maybe not going to be the case.
When you talk to Ron Johnson, Ran Paul Tom Tillis,
(16:19):
I could keep going. The idea of a fourth of
July deadline feels how to you right now? Is that
even possible?
Speaker 8 (16:28):
You know, I wouldn't count it out. But the reality is,
and this will get done, but most likely it gets
done after that, probably August. It was fascinating to hear
the representative because the fact is the Senate is going
to put their imprint on the bill. There is no
way that the House gets to hope that they can hope,
(16:49):
but they're going to get a reality of the Senate
just rubber stamping what they've done, so that is just
not going to happen. They will be battling about changes,
but in the end they've got to get something passed.
There's just no way that the Senate can fight enough
that they give the House something that it can't pass.
So it will get done, but then they're going to
(17:09):
have to live with the consequences, and that's what the
Joni Ernstown Hall experience shows. Those consequences are going to
be dramatic. On the deficit, on social safety nets, on spending, cuts,
on taxation. They are real and Republicans will feel them
in twenty twenty six and then again in twenty twenty eight.
Speaker 2 (17:29):
When we consider the role Democrats play here, Jeanie the
Democratic leader in the Senate, Chuck Schumer, is vowing in
a letter to colleagues to fight back with everything we've got.
What do they really got when this is reconciliation and
it's by design a party line issue.
Speaker 8 (17:46):
They don't got much, Kaylee. That's the reality. They're in
the minority. What they do have are gifts like Joni
Ernst and others have given them throughout the process that
they are going to tag into campaign commercials and take
out and those impacts are going to be real. When
James Carval says Democrats really need to focus on twenty
twenty six, twenty twenty eight, that's what they got. They
(18:08):
got a campaign to fight, because you can't do anything
with washing in Washington unless you control either the House,
the Senate or the White House, and they don't control either.
Speaker 6 (18:19):
This is going to be in campaign ads either way, right, Yeah,
you mean Jony Yeah, oh yeah, totally. I mean for
sure for her, one hundred percent. I mean I don't
know if it goes into others because also eighteen months
for everybody else is a long time away. Even though
but listen, I think what I keep saying as well,
just as Genie said, it's going to be really hard
to get this done by the July fourth recess. But
(18:41):
then I also said the exact same thing that Speaker
Johnson wasn't going to do it. Yeah, and everyone else
was too, you know, So I think there's a lot
happening that we all don't know about behind the scenes.
And again, as I said earlier, the Senators right now
are negotiating in public. They're negotiating with the press. I
mean to tell their sides of the stories. But so
(19:01):
did the House and then they all come together at
the well.
Speaker 2 (19:03):
When we consider that Speaker Johnson was able to meet
his own deadline, he needed the helping hand of the
President who was having meetings at the White House with
some of the most difficult members. Is President Trump is
influential for the Senate? Can he give that same helping
hand to.
Speaker 6 (19:15):
John Thune for some? I mean, I think to you
very serious members that have very serious concerns, like Senator
Rick Scott, who's very well respected in some of the
healthcare spaces and obviously fiscal spaces. Ron Johnson as well.
I don't think he can move Rand Paul. I think
Rampa as long as the debt ceilings attached, Ram Paul's out,
So I think you lose one vote there. I don't
(19:37):
know if he can help with Holly or not, but
I think he can help with Rick Scott and Ron
Johnson just because of the close relationship.
Speaker 3 (19:45):
They all have. Fascinating well, I'm sure you're going to
help us learn a lot over the coming days. It's
great to have you with us as ever Ashley Davis,
Republican strategists, alongside Geenie Schanzino, our Democratic analyst, Bloomberg Politics contributor.
Speaker 1 (20:00):
Listening to the Bloomberg Balance of Power podcast Ketchays live
weekdays at noon and five pm Eastern on Apple Cocklay
and Android Auto with the Bloomberg Business App. Listen on
demand wherever you get your podcasts, or watch us live
on YouTube.
Speaker 2 (20:15):
Watching Well Washington. But we have our eyes on events
elsewhere as well, as we consider not just domestic politics
but geopolitics too, and ongoing hot conflicts around the world,
including that of course between Russia and Ukraine. A second
round of direct talks between Russia and Ukraine was held
in Turkey today, yielding perhaps not surprisingly, no agreement on
(20:35):
any sort of ceasefire, though there will be another exchange
of prisoners. But Ukraine came to those talks having just
conducted a pretty bold aerial attack inside Russia. Far inside Russia,
We're talking hundreds and hundreds of miles from the front lines,
thanks to, according to President Vladimir Zelinsky, a more than
(20:56):
a year and a half long effort to get drones
inside Russian territory deep inside, so much so that they
were within striking distance of some of the most powerful
components of Russia's aerial fleet, those that have been used
to conduct these missile and other strikes on Ukrainian targets,
including civilian targets. Though there is some dispute Joe as
(21:18):
to the number of aircraft that were ultimately actually hit, yes,
by this drone strike, it's still incredible to see and
read about.
Speaker 3 (21:25):
Well, yeah, you can't deny the video we're looking at
here for our listeners on Bloomberg Radio. It's a shot
from a drone showing these massive Russian bombers burning while
they're still on the ground having been attacked by these
suicide drones. Really remarkable stuff. Then these spies, to your point,
they worked for months, Kaylie. Ukrainian spies got these quad
(21:45):
copter drones into Russian territory. There were more than one
hundred of them, and I guess they were obscured by
these wooden containers that opened by remote control, allowing these
things to fly into the military bases. And it's worth
noting you did target military bases, not civilians, as Russia
continues to do.
Speaker 2 (22:05):
Yeah, which is a contrast that Zelensky is trying to
note in this is that they are trying to take
out Russia's military capacity that's being used against Ukraine, obviously,
but in kind of a different way in that it
is being used really with non military targets in Ukraine
and taking the lives of untold amounts of civilians.
Speaker 3 (22:25):
It's being compared to, or being referred to as Russia's
Pearl Harbor. We saw comments in the tip sheets this
morning as well, comparing it to Israel's walkie talkie attack
against Hesbola and Lebanon. Kelly Grico specializes in this type
of thing. We wanted to have her frame it for us,
the senior fellow with the Reimagining US Grand Strategy program
(22:47):
at the Stimpson Center. Kelly, it's great to have you
back with us here on Bloomberg TV and Radio. How
would you describe this breakthrough by Ukraine?
Speaker 11 (22:56):
Well, first, thank you for having me, and I would
say this attack clearly was timed for these negotiations and Eastanbul.
But I would say what's interesting about the attack to
me is that it goes back to the very roots
of airpower in one way, and that there's always been
an emphasis on attacking air bases, that aircraft are often
(23:17):
the most vulnerable when they're on the ground, but it's
a twenty first century version of this by using these
very cheap and expensive quad copters that are carrying explosives
to cause an enormous amount of damage.
Speaker 2 (23:32):
Well, when we considered that enormous amount of damage, Kelly
Knowing Russia says it's more like ten aircraft that were affected.
Ukraine said the number was roughly forty. Do we have
a sense of what this actually does to Russia's capacity
to conduct the strikes at the pace we've been seeing
in Ukraine?
Speaker 11 (23:49):
Yes, so I don't feel like we really have very
good numbers right now in open source because we want
to see these things verified. But what I would say
is that this doesn't necessarily going to restrict I think
in a very significant way Russia's ability to conduct strikes
on Ukraine. In fact, many of these aircraft I suspect
more probably further back and are not being used in
(24:12):
these kinds of operations, though they might be rotated forward
at times to bases closer to Ukraine. But what is
significant about it is that these are dual capable aircraft,
meaning that They're also part of Russia's nuclear triad because
they can carry nuclear weapons as well, and so Russia
is going to have to think carefully about to what
degree it wants to place these assets at risk, including
(24:35):
on the ground. And retaliatory attracts from the Ukrainians because
it places at risk part of their nuclear triad, and
that starts to get very serious for uctions.
Speaker 3 (24:45):
Well, you wonder what's next here, Kelly, with regard to
a Russian retaliation against Ukraine. Surely this won't be in isolation,
but also whatever Ukraine might have left up its sleeve.
If Ukrainian spy smuggle the hundred roans into Russia for
this event, what else could they have?
Speaker 11 (25:05):
Yes, I mean that's a great question. You know, it's
interesting this attack doesn't come out of nowhere in the
sense that, you know, people have talked about these kinds
of attacks before, particularly about someone conducting something like this
against the United States at airbases at home. But the
Ukrainians are the first to do it, and they showed
a level I think of sophistication and ability to operate
(25:25):
inside Russia to be able to pull something like this off.
They were even bragging on Twitter that One of the
warehouses they use was near an FSB outpost in a
town that they were right next to it. So it's
quite interesting, and I think you're right, the Russians have
to ask themselves what could be next. I'm asking myself,
quite honestly, what's next in terms of the Russian response,
(25:46):
because I think we're going to see a significant escalation
on the part of the Russians.
Speaker 2 (25:51):
Well, what would that escalation look like, Kelly? I mean,
is there serious questions as to whether or not Russia
would choose to use part of its nuclear are arsenal.
How can they escalate short of that given everything they're
already doing.
Speaker 11 (26:04):
Yeah, So I think it's important to remember that back
in November, Putin changed Russia's nuclear doctrine to clarify that
it would consider it a attack on Russia that was
a threat to its nuclear arsenal, whether it whether a
nuclear weapon was used against its nuclear arsenal, or if
it was a conventional weapon use that threatened its nuclear
arsenal or its sovereignty, it would reserve the right to
(26:27):
respond with a nuclear weapon. Now, I don't think Russia
is going to use a nuclear asset in response to
this but I can't totally rule it out. I think
it's worth saying, and that, you know, gives me pause
that I'm even having to say that. I think they're
going to look though, for something that is very visible,
and I think signaling, not just to the Ukrainians, but
(26:48):
I think at this point they're going to want to
signal to the United States and even China. You know
that it's nuclear arsenal is non vulnerable, that it's able
to still operate effectively, so not probably a cyber attack,
and could be using a new kind of missile in Ukraine.
But I think, you know, I wouldn't rule out even
a possibility of some kind of action, perhaps in space.
There's been stories about a new satellite Cosmos that is
(27:11):
suspiciously operating near some US satellites and concerns they might
conduct an anti satellite test in space. I could potentially
see something like that happening as a response.
Speaker 3 (27:22):
Kelly Grico, you're an expert in asymmetric warfare. How does
this change the United States approach to weapons systems after
what we just saw.
Speaker 11 (27:33):
Well, how it should change it and how it will
are probably two different things. Unfortunately, you know, I think
it's clear that, you know, we have a preference for
high end systems that are expensive, that have a lot
of capability. You know, we see that with you know,
the acquisition now of the F forty seven, this new
fighter aircraft, or the B twenty one, things like that.
(27:54):
But what Ukraine is I think trying to show us
is that something that is lower cost is not necessarily ineffective.
In fact, it can have disproportionate effects. And so what
I think is concerning is that we keep seeing all
these messages from Ukraine warning us that these lower cost,
creative ways of using capabilities can be quite effective, but
(28:16):
we're not as much investing in that area in our
own defense budget to try to actually maximize our advantage.
Speaker 2 (28:24):
All right, Kelly, it's great to have you. As always,
we appreciate your insight and expertise. Kelly Grico, Senior Fellow
with the Reimagining US Greene Strategy program at the Stimson Center.
Speaker 3 (28:35):
Thanks for listening to the Balance of Power podcast. Make
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Speaker 2 (00:25):
Joe Matthew and myself, Kayley Lines, have returned to Washington
along with the majority of Congress after of course, the
Memorial Day recess. The Senate is flying in this afternoon,
this evening and are pretty quickly going to get to work,
at least behind closed doors, on figuring out what changes
they want to make to the House past big one,
big beautiful bill. Can't forget the one. Of course, it
(00:47):
passed in the House two fifteen to two fourteen. It
was very narrow, and the Speaker of the House has
warned the Senate, don't make too many changes if you
want me to be able to pass this thing.
Speaker 3 (00:55):
A second, we're still calling it OBA. That was a
thing for OBBA. Does that make it easy? I feel
like we worked off the O, but we're not doing
that anymore. I haven't been remember to build back better BBB.
That's dangerous. Ground. Yes, the President did talk about this
at the big rally, the one big rally on Friday
night outside of Pittsburgh. This is something that's very top
of mind for him. Right Let's listen.
Speaker 4 (01:14):
Right now, with the verge of passing the largest working
class tax cuts in American history, we got to get
that beautiful, big bill, beautiful, beautiful as it is, we
got to get it passed the Senate. Call you, senators
and I'll tell you have you have great people representing you,
with your senators, your congressman. You have great people. Every
(01:38):
single Democrat House member voted to impose the largest tax
hike in history. The Democrats are voting for the largest
highest tax hike in history. I've never heard of it before.
Speaker 3 (01:51):
Now, as this bill goes to the Senate, the big question,
of course, that we've been asking here on this program
and everyone's asking inside the nation's capital, is kind of
change will the Upper Chamber make and will that make
this more difficult to pass when it comes back in
the House. We actually have an opportunity to speak to
Republican leadership in the House to talk about that very question.
Speaker 5 (02:13):
Right now.
Speaker 3 (02:13):
Congressoman Lisa McLean is with us of Michigan's ninth District,
Chair of the House Republican Conference in studio, no less.
Speaker 6 (02:21):
Thanks for coming to see us, Thanks for having me.
Speaker 3 (02:23):
Are you getting the jitters? Now that Senators are flying
back into town? What are they going to do to.
Speaker 7 (02:26):
This thing's getting real? My hope is that they don't
do a lot right. We passed it very narrowly in
the House. We don't have a big margin. Obviously that's
no secret. So my hope is that they make very
very few changes, they send the bill back, and we
do get it passed by July fourth. The President Trump
has been very clear that that is his deadline, and
(02:49):
I'll tell you I wouldn't want to be the one
that stands in front in front of President Trump's deadline.
Speaker 2 (02:54):
Well, we know he's not afraid to get people on
the phone, even call them out publicly if necessary. But obviously,
your job is Republican Conference chair, is to talk to
the membership, get an understand of understanding of what their
deal breakers are. Knowing they were not shy about expressing
that during the process in the House. What is the
most potential deadly change the Senate can make to this bill?
Speaker 7 (03:16):
I hope they don't do many changes to reduce the
amount of savings, right. I think we've hit the sweet spot.
I don't believe they'll make many changes to Medicaid because again,
that was a very delicate balance and salt is obviously
very important. So I don't see a lot of changes
(03:38):
that they really can make. I know some of the
talk has been out there on you know, making sure
that we have coverage in the rural hospitals and whatnot,
which will make sure that we do. The bill is
pretty well crafted. And remember we'd been working on this
bill for almost nine months, so we've had our family fights,
so to speak, to get to the place that we're.
Speaker 8 (03:59):
At right now.
Speaker 3 (04:00):
What if it's in fact more cutting that comes from
the Senate, what do you tell Mike Crapo says, let's
make the Trump tax cuts permanent, make the cuts even deeper.
Would it pass the House when it came back.
Speaker 7 (04:11):
I think it would. I think it would, provided it
just doesn't go too far for a lot of our members.
Look at Speaker Johnson has a very small eye of
the needle that he needed to thread, and I think
he threaded that perfectly right. Some members like me that
are in a Ruby red districts. Wish we would have
been able to cut more, but I understand why we didn't,
(04:33):
and that's this balance. What I will remind everybody is
we need you know, everyone's talking about certainty, certainty, certainty.
That's why it's so critical that the Senate passed this
is it will give Americans the certainty that they've been
asking for, and I'm confident they will.
Speaker 2 (04:50):
Well, what do we consider what Americans will actually see
if and when this becomes law in terms of the
changes in their pocketbook. A lot of this is just
an extension of the tax rates they've currently been pay
That's the point the President was making. It's avoiding a
tax hike, not necessarily giving everyone a tax cut. Though,
how do you message that successfully as you look ahead
to twenty twenty six.
Speaker 7 (05:10):
Exactly what you said is we want to avoid the
largest tax increase then a lot of Americans will see
in their entire lifetime. Look at in Michigan, if we
do not pass this bill, over seven hundred thousand small
businesses in just Michigan will see their tax rate increase
(05:30):
to forty three percent. That is not good for the economy.
That is not good for michiganers. So we have to
make sure that we extend these tax cuts. And I
will remind you every single Democrat voted to raise the
American people's taxes. We're not for that.
Speaker 3 (05:46):
There's a question about the debt ceiling here, of course,
that's folded into this bill. Scott Bessett. Yesterday the Treasury
Secretary would not be specific about the X state, suggesting
that that might increase the urgency and the timeline and
getting this done. Is that a good strategy? Does that
actually motivate lawmakers?
Speaker 7 (06:02):
Well, I can share with you. I believe it does
motivate lawmakers.
Speaker 3 (06:06):
Let's put it on I'd say it's the fourth of August,
Congress women. We need to get it done by them.
Speaker 7 (06:10):
I think we don't have the exact date, or no
one can provide the exact date right now, but I
do know that it's sometime in the near future. So
let's put it in the one big, beautiful bill and
let's just deal with everything so we can get onto
the real business of Congress, which is the appropriations. Right,
we have to begin to pass our appropriations package.
Speaker 2 (06:31):
Well, the Senate may ultimately if it wants to make
a number of these cuts permanent or extend the duration
before we have another X date crisis on our hands.
Actually lift the amount of the debt sealing hike in
the package to five trillion from four trillion. Would that
be problematic or do you think that can be?
Speaker 7 (06:46):
You know, I think that will be a little bit
of problematic. Any tweak or adjustment that is made in
the Senate is not going to be an easy lift
for us because we spent all of the time already
having the internal fights and arguments, and you know, different
people representing their districts, so we really can't have a
(07:06):
lot of changes. It is not going to be positive
for the American people if we do that, it just
makes everybody's job way more difficult.
Speaker 3 (07:13):
There's been a lot of talk about Joni Ernstown hall experience,
which we're going to get into, and a little bit here.
I'm just wondering what you heard from your members who
went home, marched in parades, I guess in some cases
held town hall meetings. What was the point of concern
that they were hearing from voters.
Speaker 7 (07:26):
Yeah, well, I actually did a Memorial Day parade and
a more event and several other events, talked to business owners,
had a round table with my elected officials, et cetera,
et cetera, And what I heard in my district in
Michigan is a sense of optimism and hope because the
people in my state look at the tariffs and the
(07:48):
economy a little bit differently. And I say that because
Michigan ranks number three behind California in New York in
the amount of manufacturing jobs lost, So that is a
horror thing. What they see President Trump doing is bringing jobs,
especially manufacturing jobs, back to their state of Michigan. So
(08:09):
they are extremely excited and very optimistic with what's going
on in the economy right now.
Speaker 2 (08:14):
But are you not hearing from some of those manufacturers
that say, lifting steel and aluminum teriffs from twenty five
percent to fifty percent and therefore elevating input costs is
an issue.
Speaker 7 (08:24):
Yeah. To be fair, yes they are, but they're giving
the president some grace. They understand that tariffs are just
a tool in the toolbox to level the playing field,
so to speak. So what I'm hearing is, eh, there
is a little bit of all concern, but they do
trust his decision making on economics and economic policy because
(08:47):
he's done it before and in his first term. It
went really well for a lot of the businesses in
my community, and they're hopeful that we're going to get
this economy back on track.
Speaker 3 (08:56):
Well with that trepidation is they're also a conversation of
about pulling up the moving trucks and starting to move
manufacturing supply chains. Do they say, Congresswoman, give us give
us six to nine months because we're bringing it back
to Michigan. Is that how this ends?
Speaker 7 (09:10):
Yes, they are asking, just like they're giving the President
said grace. They're asking for a little bit of grace.
If they're showing progress moving facilities.
Speaker 8 (09:18):
Back, will we see that?
Speaker 7 (09:20):
You know, I'm confident. I don't want to get ahead
of the president. But what I can tell you about
President Trump is he's been very receptive to the American
worker in listening right, there are unintended consequences when we
do policy changes. He's very in tune with the American
worker and he wants to listen to what they're dealing
with in the American manufacturer and he will make changes
(09:43):
based upon that.
Speaker 2 (09:44):
All right, Chairwoman, great to have you, thanks with us
in our Washington, d C. Studio. The Chairwoman of the
House Republican Conference representing Michigan's ninth district, Lisa McClean with us.
Speaker 1 (09:56):
You're listening to the Bloomberg Balance of Power podcast. Catch
us Lie I have weekdays at noon and five pm.
E's durn on Apple Cockley and Android Otto with the
Blooburg 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 (10:15):
We're in Washington, where we just wrapped up a conversation
with the chairwoman of the House Republican Conference, Lisa mcclan
and Joe made mentioned in our conversation with her about
the experience of Iowa Senator Joni Earns, the Republican who
held a town hall over the Memorial Day recess and
was actually pressed by a constituent and people who were
in attendance about the cuts to Medicaid and SNAP that
(10:37):
could potentially come if the one big beautiful bill indeeds
become lost, suggesting that people will die. This was the
senator's response.
Speaker 9 (10:47):
People are not, well, we all are going to die,
said spokes Okay, no, but but well, what you.
Speaker 3 (11:01):
Don't want to do is listen to me.
Speaker 5 (11:02):
When I say that we are going to focus on
those that are most vulnerable, those that made the eligibility
requirements for meta paid we will protect.
Speaker 3 (11:14):
Yes, you heard her say, well, we are all going
to die. Fast forward through the outrage many rounds on
social media, a bunch of campaign ads that Democrats are
making with that tape, to the response from Senator Joni Ernst,
who went all the way to an actual graveyard to
record a video that maybe we'll call a non apology.
Speaker 10 (11:35):
Listen, I would like to take this opportunity to sincerely
apologize for a statement that I made yesterday at my
town hall.
Speaker 8 (11:46):
See.
Speaker 10 (11:46):
I was in the process of answering a question that
had been asked by an audience member when a woman
who was extremely distraught screamed out from the back corner
of the auditorium people are going to die. And I
made an incorrect assumption that everyone in the auditorium understood that, yes,
(12:13):
we are all going to perish from this earth.
Speaker 2 (12:18):
So on that grim note, let's assemble our political panel today.
Jeanie Shanzino is a Wes S. Bloomberg politics contributor, democratic analyst,
and Tenior Democracy Fellow at the Center for the study
of the Presidency and Congress alongside Ashley Davis, Republican strategist
and partner at S three Group. Ashley, I'll come to
you on this one first. As the Republican at the table,
when you are being pressed on issues that actually do
(12:40):
affect people's health and health outcomes and suggest that we're
all going to die anyway, then kind of double down
in that fashion. Does this serve the Senator will does
it serve Republicans at large?
Speaker 6 (12:52):
Well, I knew you were coming to me first. I mean,
Senator Earns is a very serious member as sure, she's
been on the show and she she so I was
actually surprised with the response today. I do think that
from the initial town hall. These town halls are exhausting,
which is why most people are canceling theirs or they're
(13:13):
being told like because and we all know this, this
is not a political thing. They're being stacked with Democrats
to ask hard questions, which, by the way, Republicans would
do the exact same thing. So I mean, like, this
is not a political statement that I'm making, So I
thinks think they're exhausting. I think that probably the response
was a little bit worse than the actual mistake to
begin with, she could have just said, like, listen, that
(13:34):
was a little bit out of context or whatever. But
the doubling down, I mean, she's making a strategic decision
to do it. She knows what she's doing.
Speaker 3 (13:42):
So with a little bit of snark, Genie, I'm very
in touch with my own mortality, so I have to
be careful here. I can barely sleep through the night
with this kind of stuff. Is this actually great for Democrats?
Speaker 8 (13:54):
It is, you know, and Joe I think you know,
she woke us all up to the fact that we're
all gonna die. The reality is is that that it
was very strange. It fell flat. Obviously the cemetery walk.
People kept saying it was Ai. It was truly her.
And this is a woman who came to Washington making
(14:16):
her name with the Squealing Pigs commercial that was amazing,
talking about cutting pork, and yet she's doubling down on
cutting medicaid that impacts forty percent of young people children
in her district in her state rather and fifty percent
of seniors. And so it was strange because as you
(14:37):
listen to the rest of the town hall, she said
perfectly clearly that she understands how important Medicaid is, she
understands how important it is to her constituents. She could
have just said that and said what Mike Johnson said,
which is we're trying to cut people who are, you know,
playing the system essentially. Now, I don't agree with Mike Johnson,
(14:57):
nor do I give Jony Ernst tips, but I'm really
thinking she needs to go back and listen to his
Meet the Press interview because he explained it a lot
better than she did, and he certainly didn't say, oh,
don't worry, we're all going to die anyways.
Speaker 10 (15:11):
Well.
Speaker 2 (15:11):
I also wonder how some of her colleagues received this
or viewed this. Senators like Josh Holly, for example, or
Susan Collins, who have raised serious concerns about the cuts
to Medicaid, suggesting they may want to see a different
version through the Senate. Could this kind of episode give
more ammunition to that argument.
Speaker 5 (15:29):
I don't know.
Speaker 6 (15:30):
I mean, I think this is an issue that is
not going to impact It may impact her because we
have to remember, she's up in twenty twenty six, so
she doesn't have that long to lose this kind of statement,
and obviously the Democrats are going to make tons of
ads over it, But I don't know if it impacts
the broader bill. I think there's so many things happening
behind the scenes. We know that of just all the
(15:51):
different lovers to make sure that we at least don't
lose any more than three votes, and I don't think
this impacts it.
Speaker 5 (15:58):
Well.
Speaker 3 (15:58):
We just spoke with a member of Republican House leadership,
of course on the program, Genie and Congresswoman Maclain was
asking hoping maybe that the Senate not make any big
changes to this bill. But based on the conversations we
heard on Sunday morning and of course throughout the week
last week, that's just maybe not going to be the case.
When you talk to Ron Johnson, Ran Paul Tom Tillis,
(16:19):
I could keep going. The idea of a fourth of
July deadline feels how to you right now? Is that
even possible?
Speaker 8 (16:28):
You know, I wouldn't count it out. But the reality is,
and this will get done, but most likely it gets
done after that, probably August. It was fascinating to hear
the representative because the fact is the Senate is going
to put their imprint on the bill. There is no
way that the House gets to hope that they can hope,
(16:49):
but they're going to get a reality of the Senate
just rubber stamping what they've done, so that is just
not going to happen. They will be battling about changes,
but in the end they've got to get something passed.
There's just no way that the Senate can fight enough
that they give the House something that it can't pass.
So it will get done, but then they're going to
(17:09):
have to live with the consequences, and that's what the
Joni Ernstown Hall experience shows. Those consequences are going to
be dramatic. On the deficit, on social safety nets, on spending, cuts,
on taxation. They are real and Republicans will feel them
in twenty twenty six and then again in twenty twenty eight.
Speaker 2 (17:29):
When we consider the role Democrats play here, Jeanie the
Democratic leader in the Senate, Chuck Schumer, is vowing in
a letter to colleagues to fight back with everything we've got.
What do they really got when this is reconciliation and
it's by design a party line issue.
Speaker 8 (17:46):
They don't got much, Kaylee. That's the reality. They're in
the minority. What they do have are gifts like Joni
Ernst and others have given them throughout the process that
they are going to tag into campaign commercials and take
out and those impacts are going to be real. When
James Carval says Democrats really need to focus on twenty
twenty six, twenty twenty eight, that's what they got. They
(18:08):
got a campaign to fight, because you can't do anything
with washing in Washington unless you control either the House,
the Senate or the White House, and they don't control either.
Speaker 6 (18:19):
This is going to be in campaign ads either way, right, Yeah,
you mean Jony Yeah, oh yeah, totally. I mean for
sure for her, one hundred percent. I mean I don't
know if it goes into others because also eighteen months
for everybody else is a long time away. Even though
but listen, I think what I keep saying as well,
just as Genie said, it's going to be really hard
to get this done by the July fourth recess. But
(18:41):
then I also said the exact same thing that Speaker
Johnson wasn't going to do it. Yeah, and everyone else
was too, you know, So I think there's a lot
happening that we all don't know about behind the scenes.
And again, as I said earlier, the Senators right now
are negotiating in public. They're negotiating with the press. I
mean to tell their sides of the stories. But so
(19:01):
did the House and then they all come together at
the well.
Speaker 2 (19:03):
When we consider that Speaker Johnson was able to meet
his own deadline, he needed the helping hand of the
President who was having meetings at the White House with
some of the most difficult members. Is President Trump is
influential for the Senate? Can he give that same helping
hand to.
Speaker 6 (19:15):
John Thune for some? I mean, I think to you
very serious members that have very serious concerns, like Senator
Rick Scott, who's very well respected in some of the
healthcare spaces and obviously fiscal spaces. Ron Johnson as well.
I don't think he can move Rand Paul. I think
Rampa as long as the debt ceilings attached, Ram Paul's out,
So I think you lose one vote there. I don't
(19:37):
know if he can help with Holly or not, but
I think he can help with Rick Scott and Ron
Johnson just because of the close relationship.
Speaker 3 (19:45):
They all have. Fascinating well, I'm sure you're going to
help us learn a lot over the coming days. It's
great to have you with us as ever Ashley Davis,
Republican strategists, alongside Geenie Schanzino, our Democratic analyst, Bloomberg Politics contributor.
Speaker 1 (20:00):
Listening to the Bloomberg Balance of Power podcast Ketchays live
weekdays at noon and five pm Eastern on Apple Cocklay
and Android Auto with the Bloomberg Business App. Listen on
demand wherever you get your podcasts, or watch us live
on YouTube.
Speaker 2 (20:15):
Watching Well Washington. But we have our eyes on events
elsewhere as well, as we consider not just domestic politics
but geopolitics too, and ongoing hot conflicts around the world,
including that of course between Russia and Ukraine. A second
round of direct talks between Russia and Ukraine was held
in Turkey today, yielding perhaps not surprisingly, no agreement on
(20:35):
any sort of ceasefire, though there will be another exchange
of prisoners. But Ukraine came to those talks having just
conducted a pretty bold aerial attack inside Russia. Far inside Russia,
We're talking hundreds and hundreds of miles from the front lines,
thanks to, according to President Vladimir Zelinsky, a more than
(20:56):
a year and a half long effort to get drones
inside Russian territory deep inside, so much so that they
were within striking distance of some of the most powerful
components of Russia's aerial fleet, those that have been used
to conduct these missile and other strikes on Ukrainian targets,
including civilian targets. Though there is some dispute Joe as
(21:18):
to the number of aircraft that were ultimately actually hit, yes,
by this drone strike, it's still incredible to see and
read about.
Speaker 3 (21:25):
Well, yeah, you can't deny the video we're looking at
here for our listeners on Bloomberg Radio. It's a shot
from a drone showing these massive Russian bombers burning while
they're still on the ground having been attacked by these
suicide drones. Really remarkable stuff. Then these spies, to your point,
they worked for months, Kaylie. Ukrainian spies got these quad
(21:45):
copter drones into Russian territory. There were more than one
hundred of them, and I guess they were obscured by
these wooden containers that opened by remote control, allowing these
things to fly into the military bases. And it's worth
noting you did target military bases, not civilians, as Russia
continues to do.
Speaker 2 (22:05):
Yeah, which is a contrast that Zelensky is trying to
note in this is that they are trying to take
out Russia's military capacity that's being used against Ukraine, obviously,
but in kind of a different way in that it
is being used really with non military targets in Ukraine
and taking the lives of untold amounts of civilians.
Speaker 3 (22:25):
It's being compared to, or being referred to as Russia's
Pearl Harbor. We saw comments in the tip sheets this
morning as well, comparing it to Israel's walkie talkie attack
against Hesbola and Lebanon. Kelly Grico specializes in this type
of thing. We wanted to have her frame it for us,
the senior fellow with the Reimagining US Grand Strategy program
(22:47):
at the Stimpson Center. Kelly, it's great to have you
back with us here on Bloomberg TV and Radio. How
would you describe this breakthrough by Ukraine?
Speaker 11 (22:56):
Well, first, thank you for having me, and I would
say this attack clearly was timed for these negotiations and Eastanbul.
But I would say what's interesting about the attack to
me is that it goes back to the very roots
of airpower in one way, and that there's always been
an emphasis on attacking air bases, that aircraft are often
(23:17):
the most vulnerable when they're on the ground, but it's
a twenty first century version of this by using these
very cheap and expensive quad copters that are carrying explosives
to cause an enormous amount of damage.
Speaker 2 (23:32):
Well, when we considered that enormous amount of damage, Kelly
Knowing Russia says it's more like ten aircraft that were affected.
Ukraine said the number was roughly forty. Do we have
a sense of what this actually does to Russia's capacity
to conduct the strikes at the pace we've been seeing
in Ukraine?
Speaker 11 (23:49):
Yes, so I don't feel like we really have very
good numbers right now in open source because we want
to see these things verified. But what I would say
is that this doesn't necessarily going to restrict I think
in a very significant way Russia's ability to conduct strikes
on Ukraine. In fact, many of these aircraft I suspect
more probably further back and are not being used in
(24:12):
these kinds of operations, though they might be rotated forward
at times to bases closer to Ukraine. But what is
significant about it is that these are dual capable aircraft,
meaning that They're also part of Russia's nuclear triad because
they can carry nuclear weapons as well, and so Russia
is going to have to think carefully about to what
degree it wants to place these assets at risk, including
(24:35):
on the ground. And retaliatory attracts from the Ukrainians because
it places at risk part of their nuclear triad, and
that starts to get very serious for uctions.
Speaker 3 (24:45):
Well, you wonder what's next here, Kelly, with regard to
a Russian retaliation against Ukraine. Surely this won't be in isolation,
but also whatever Ukraine might have left up its sleeve.
If Ukrainian spy smuggle the hundred roans into Russia for
this event, what else could they have?
Speaker 11 (25:05):
Yes, I mean that's a great question. You know, it's
interesting this attack doesn't come out of nowhere in the
sense that, you know, people have talked about these kinds
of attacks before, particularly about someone conducting something like this
against the United States at airbases at home. But the
Ukrainians are the first to do it, and they showed
a level I think of sophistication and ability to operate
(25:25):
inside Russia to be able to pull something like this off.
They were even bragging on Twitter that One of the
warehouses they use was near an FSB outpost in a
town that they were right next to it. So it's
quite interesting, and I think you're right, the Russians have
to ask themselves what could be next. I'm asking myself,
quite honestly, what's next in terms of the Russian response,
(25:46):
because I think we're going to see a significant escalation
on the part of the Russians.
Speaker 2 (25:51):
Well, what would that escalation look like, Kelly? I mean,
is there serious questions as to whether or not Russia
would choose to use part of its nuclear are arsenal.
How can they escalate short of that given everything they're
already doing.
Speaker 11 (26:04):
Yeah, So I think it's important to remember that back
in November, Putin changed Russia's nuclear doctrine to clarify that
it would consider it a attack on Russia that was
a threat to its nuclear arsenal, whether it whether a
nuclear weapon was used against its nuclear arsenal, or if
it was a conventional weapon use that threatened its nuclear
arsenal or its sovereignty, it would reserve the right to
(26:27):
respond with a nuclear weapon. Now, I don't think Russia
is going to use a nuclear asset in response to
this but I can't totally rule it out. I think
it's worth saying, and that, you know, gives me pause
that I'm even having to say that. I think they're
going to look though, for something that is very visible,
and I think signaling, not just to the Ukrainians, but
(26:48):
I think at this point they're going to want to
signal to the United States and even China. You know
that it's nuclear arsenal is non vulnerable, that it's able
to still operate effectively, so not probably a cyber attack,
and could be using a new kind of missile in Ukraine.
But I think, you know, I wouldn't rule out even
a possibility of some kind of action, perhaps in space.
There's been stories about a new satellite Cosmos that is
(27:11):
suspiciously operating near some US satellites and concerns they might
conduct an anti satellite test in space. I could potentially
see something like that happening as a response.
Speaker 3 (27:22):
Kelly Grico, you're an expert in asymmetric warfare. How does
this change the United States approach to weapons systems after
what we just saw.
Speaker 11 (27:33):
Well, how it should change it and how it will
are probably two different things. Unfortunately, you know, I think
it's clear that, you know, we have a preference for
high end systems that are expensive, that have a lot
of capability. You know, we see that with you know,
the acquisition now of the F forty seven, this new
fighter aircraft, or the B twenty one, things like that.
(27:54):
But what Ukraine is I think trying to show us
is that something that is lower cost is not necessarily ineffective.
In fact, it can have disproportionate effects. And so what
I think is concerning is that we keep seeing all
these messages from Ukraine warning us that these lower cost,
creative ways of using capabilities can be quite effective, but
(28:16):
we're not as much investing in that area in our
own defense budget to try to actually maximize our advantage.
Speaker 2 (28:24):
All right, Kelly, it's great to have you. As always,
we appreciate your insight and expertise. Kelly Grico, Senior Fellow
with the Reimagining US Greene Strategy program at the Stimson Center.
Speaker 3 (28:35):
Thanks for listening to the Balance of Power podcast. Make
sure to subscribe if you haven't already an Apple, Spotify,
or wherever you get your podcasts, and you can find
us live every weekday from Washington, DC at noontime Eastern
at bloomberg dot com.
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