Instant Reaction: Trump-Backed Funding Plan Fails

Bloomberg Audio Studios, Podcasts, radio news from Bloomberg World Headquarters 0:00:08.280 --> 0:00:10.920 in New York. I'm Doug Prisner with special coverage of 0:00:10.960 --> 0:00:14.320 the US House vote on a stopgap funding bill to 0:00:14.400 --> 0:00:18.320 avert a government shutdown. This bill has just been defeated 0:00:18.800 --> 0:00:22.520 after more than thirty Republicans voted against it. Government funding 0:00:22.560 --> 0:00:26.599 will now lapse Friday night without Congressional action. By the way, 0:00:26.600 --> 0:00:29.360 this bill did include a suspension of the federal debt 0:00:29.400 --> 0:00:32.280 limit for two years, and it did have the support 0:00:32.600 --> 0:00:35.560 of President elect Trump. For a closer look, Now, let's 0:00:35.600 --> 0:00:38.559 bring in Bloomberg's Mike Dorning. He covers Congress for US 0:00:38.840 --> 0:00:42.240 from our bureau in Washington, DC. Mike, was this really 0:00:42.320 --> 0:00:43.680 a surprise the outcome here? 0:00:44.120 --> 0:00:47.159 It wasn't at all a surprise. We've been expecting this 0:00:47.240 --> 0:00:50.440 since this deal was announced. They weren't able to get 0:00:50.479 --> 0:00:53.639 support from Democrats, and they weren't able to get support 0:00:53.960 --> 0:00:55.640 from conservative Republicans. 0:00:56.080 --> 0:01:00.320 It was late yesterday, though, that President Electrump can out 0:01:00.440 --> 0:01:04.440 yet against It. Wasn't that after Elon Musk voiced his opinion. 0:01:05.040 --> 0:01:10.480 Absolutely, you're right. Elon Musk just savaged the bill online 0:01:10.720 --> 0:01:13.760 all day long Wednesday, and then By the end of 0:01:13.760 --> 0:01:18.000 the day, Trump joined with him and came out against 0:01:18.040 --> 0:01:19.640 the bipartisan deal. 0:01:19.880 --> 0:01:22.520 So what was the biggest sticking point here? Was it 0:01:22.680 --> 0:01:26.040 the suspension of the federal dead limit for two years? 0:01:26.600 --> 0:01:30.399 Well, Trump wanted to suspend the debt limit because he 0:01:30.440 --> 0:01:32.920 didn't want to do it with him as president. He 0:01:32.959 --> 0:01:36.040 wanted to do it with Biden as president. And also 0:01:36.200 --> 0:01:39.080 that is often something where you have to give something 0:01:39.160 --> 0:01:42.679 up to Congress to get them to raise the debt limit, 0:01:42.760 --> 0:01:45.680 and he didn't want to do that. So that's why 0:01:46.680 --> 0:01:48.600 one of the reasons why a lot of Democrats didn't 0:01:48.640 --> 0:01:51.440 vote for it, and definitely a reason why the conservative 0:01:51.440 --> 0:01:54.480 Republicans voted against it. They most of them don't like 0:01:54.680 --> 0:01:55.800 raising the debt limit. 0:01:56.080 --> 0:01:58.520 So government funding, as we know well, laps Friday night 0:01:58.600 --> 0:02:01.240 without congressional action. Where do we go from here. 0:02:01.440 --> 0:02:04.160 Well, it's quite possible that they'll come up with some 0:02:04.520 --> 0:02:08.760 temporary patch to keep things going a little longer. That 0:02:08.960 --> 0:02:11.720 might be something that lasts into next year, but it 0:02:11.800 --> 0:02:15.160 might just be something that lasts a little while. It's 0:02:15.160 --> 0:02:20.960 also possible that a shutdown occurs. Right now, Speaker Johnson's 0:02:21.000 --> 0:02:23.680 going to go back into his office and huddle with 0:02:23.800 --> 0:02:26.400 Republicans and try to figure out their next step. 0:02:26.560 --> 0:02:30.360 He was the negotiator of that earlier bipartisan agreement, and 0:02:30.400 --> 0:02:32.960 I was reading today that maybe his leadership is now 0:02:33.000 --> 0:02:34.200 in doubt. Is that a fact? 0:02:35.160 --> 0:02:39.360 Well, this is definitely a failure by the speaker. The 0:02:39.639 --> 0:02:43.360 job of a congressional leader is to kind of figure 0:02:43.360 --> 0:02:47.920 out the parameters of what's acceptable, and he failed to 0:02:48.760 --> 0:02:51.880 have a sense or incorporate a sense of what Trump 0:02:52.120 --> 0:02:56.519 and Musk would tolerate. And as a result, either because 0:02:57.639 --> 0:03:00.919 he didn't think through that that they would go far 0:03:01.720 --> 0:03:05.160 as far as they did, or because maybe they've changed 0:03:05.200 --> 0:03:09.440 their minds along the way. As a result, this spell apart. 0:03:09.800 --> 0:03:12.720 So is President elect Trump still in control? Does he 0:03:12.760 --> 0:03:16.560 have the upper hand on any deal that maybe worked 0:03:16.600 --> 0:03:18.400 out before that Friday night deadline? 0:03:19.240 --> 0:03:23.720 He has the ability, probably in most instances, to scuttle 0:03:23.760 --> 0:03:28.480 a deal. So he essentially already has a veto power 0:03:28.680 --> 0:03:31.720 over congressional Republicans at least now. 0:03:31.760 --> 0:03:34.240 One of the things that Musk was saying in his 0:03:34.800 --> 0:03:38.680 tweet about the earlier agreement was that he saw it 0:03:38.760 --> 0:03:41.520 as being a crime, in that anyone who voted in 0:03:41.560 --> 0:03:44.840 favor of it should be voted out of office in 0:03:45.040 --> 0:03:48.240 two years, do you think that Musk's influence over the 0:03:48.280 --> 0:03:50.640 process will remain as strong as it has been in 0:03:50.680 --> 0:03:52.280 the last twenty four hours. 0:03:53.200 --> 0:03:56.640 He will remain influential over the process if he chooses 0:03:56.680 --> 0:04:02.120 to use that influence, because remember, he was the largest 0:04:02.320 --> 0:04:06.800 political donor in the United States this past year. He 0:04:06.920 --> 0:04:09.880 was also the richest man in the world. So if 0:04:09.880 --> 0:04:14.000 you have Donald Trump, the leader of the Republican Party 0:04:14.400 --> 0:04:17.480 and the richest man in the world, the biggest political 0:04:17.520 --> 0:04:21.359 donor against you in a Republican primary, that's a big 0:04:21.440 --> 0:04:24.560 problem for you. So you have to think twice before 0:04:24.600 --> 0:04:25.440 you defy them. 0:04:25.600 --> 0:04:29.599 Speaking with Bloomberg's Mike Dorning there in response to the 0:04:29.720 --> 0:04:33.279 bill on stopgap funding to avert a government shutdown. It 0:04:33.360 --> 0:04:37.560 has been defeated after more than thirty Republicans voted against it, 0:04:37.600 --> 0:04:42.119 and now government funding will lapse Friday night without congressional action. 0:04:42.680 --> 0:04:45.280 So Mike, back to you. In terms of what the 0:04:45.360 --> 0:04:49.880 day will be like, Friday, will really be incumbent upon 0:04:50.279 --> 0:04:53.560 Mike Johnson, Speaker of the House, to get leadership together, 0:04:53.720 --> 0:04:55.840 to try to get people on the same page. First 0:04:55.880 --> 0:04:56.520 thing in the morning. 0:04:57.560 --> 0:05:00.680 He'll probably be already working on this time now. Part 0:05:00.680 --> 0:05:04.039 of it is also maybe he's hoping that this will 0:05:04.640 --> 0:05:08.359 get Trump to believe it's not possible to do a 0:05:08.440 --> 0:05:13.000 dead limit increase this year, but he may not be 0:05:13.080 --> 0:05:15.240 able to persuade Trump at that. It might be that 0:05:15.279 --> 0:05:20.000 Trump would rather have a shutdown than forego a dead 0:05:20.040 --> 0:05:22.680 limit increase before he comes into office. 0:05:22.720 --> 0:05:25.760 And we know where mister Musk is, particularly with this 0:05:25.920 --> 0:05:30.359 new committee sending up to look for more efficiencies in 0:05:30.400 --> 0:05:33.839 the way in which the US government operates? Doge I 0:05:33.880 --> 0:05:36.719 think as how it's being referred to, is there anything 0:05:36.760 --> 0:05:39.520 to suggest that Musk was trying to make a point 0:05:39.680 --> 0:05:41.480 in sabotaging this bill. 0:05:42.600 --> 0:05:45.200 I think one of the things he did want to 0:05:45.240 --> 0:05:49.680 show is that he's serious about cutting back what he 0:05:49.800 --> 0:05:54.120 considers to be wasteful spending and show that the members 0:05:54.160 --> 0:05:58.479 of Congress that he has some power to get them 0:05:58.720 --> 0:06:01.920 to cut back spending. Because remember, his group is just 0:06:02.000 --> 0:06:05.160 like an advisory group, It doesn't really have any power. 0:06:05.640 --> 0:06:09.520 His power is twofold. His power is because he's one 0:06:09.520 --> 0:06:12.640 of Trump's key advisors and he can influence the president. 0:06:13.120 --> 0:06:16.520 And his power is because of his money and his 0:06:16.960 --> 0:06:22.160 social media platform. So he was using both of those 0:06:22.240 --> 0:06:25.680 leavers of power to gain concessions on this. 0:06:25.960 --> 0:06:28.160 So, as we know, government funding will lapse at twelve 0:06:28.200 --> 0:06:30.839 oh one a m. Saturday. Is there a risk that 0:06:30.920 --> 0:06:33.600 we could get a partial government shutdown first thing in 0:06:33.640 --> 0:06:34.640 the morning on Saturday. 0:06:35.360 --> 0:06:39.040 There's definitely a risk, a high risk that will have 0:06:39.080 --> 0:06:42.000 a government shut down first thing in the morning Saturday. 0:06:42.120 --> 0:06:46.000 Now it's also possible that they come up with something 0:06:46.600 --> 0:06:49.080 and you know, if they missed them Friday night at 0:06:49.120 --> 0:06:54.400 midnight deadline, and you know, the government's formally, you know, 0:06:54.600 --> 0:06:57.640 officially shut down for a few hours or for Saturday 0:06:57.640 --> 0:07:00.360 and Sunday, is probably not going to have a big 0:07:00.400 --> 0:07:04.200 effect on the country. The bigger thing that would have 0:07:04.240 --> 0:07:08.159 an effect is a drawn out shutdown in which non 0:07:08.279 --> 0:07:13.680 essential government services would stop and none of the employees 0:07:13.720 --> 0:07:14.400 would be paid. 0:07:15.120 --> 0:07:17.600 Mike will leave it there, Thank you so much, Bloomberg's 0:07:17.640 --> 0:07:21.360 Mike Dorning. He covers Congress for us here on Bloomberg 0:07:21.720 --> 0:07:25.040 Just to recap, the stopgap funding bill to avert a 0:07:25.080 --> 0:07:28.600 government shutdown has been defeated. We'll have more on this 0:07:28.640 --> 0:07:30.840 throughout the night here on Bloomberg Radio.