Bloomberg Talks
00:02:48 · Abby Joseph Cohen
Russell Vought, who was one of the architects of Project 2025 as director of OMB, has specifically ignored Congressional bills that were passed and signed by the president, and he's refused to pay out those appropriations in any number of categories, including scientific research. We also know that executive agencies have, in some cases, shied away from their responsibilities to be regulators. We have seen dramatic shifting and reductions in staff at places like the IRS, the SEC, the CFTC. And even if you're not a big supporter of heavy-duty regulation, I think most people in this country believe in some sort of guardrails, and we need to make sure that those are re-established. That is under the purview of the executive, not of the Congress. And one other area we need to be concerned about, one of the agencies that has been truly eviscerated during the last two years has been CISA, which is the group that looks at things like cyberterrorism, cybercrime, and we don't have people basically running that organization in any meaningful way at this point. So in order to assess what the economic impact going forward will be, we don't yet have enough information. But clearly, voters have spoken. They have indicated that there are things that they are not happy with. But there's one important test coming up for the current administration and the existing Congress. And that has to do with the budget deficit. Under the so-called One Big Beautiful Bill, we have seen an enormous run-up in deficits, both in terms of dollars, but also as a percentage of GDP. And we're going to be running out of running room in early December when we need to see if the debt limit will be raised. And let's see what sort of negotiation the president is willing to do with the existing Congress in terms of getting that done.
00:04:56 · S1
[00:04:56] S1: A lot to unpack there. And I wonder on this idea, because clearly you are concerned about the direction of a lot of things. And as you note, the president has the veto power. Is there anything this Congress can do? We've heard from the incoming oversight committee chair saying lawyer up. Does that, investigations, anything of those lines reverse or slow down some of the trends, or do we need to wait for 2028?
00:05:19 · Abby Joseph Cohen
[00:05:19] S0: So I'm an economic analyst and a market analyst, not a political analyst. And so the Congress may very well decide to pursue many of those investigations. What I would hope is that the incoming Congress in January do things like approach economic policy. For example, take back congressional control of tariffs. I think that would be a very useful thing. I also think to reestablish some of the soft power that the United States has had in terms of reestablishing global alliances. You know, soft power is economic power. The willingness of other nations to be with us as part of a trade bloc and so on is critically important. I'm still scratching my head as to why The Trump administration concluded that wood chips from Canada that get imported by farmers in Wisconsin and upstate New York, why that was a security risk. So we need to have some more realistic approaches to economic policies, including tariffs and so on. And I also hope that we will see that the new leadership in the Congress will move in a very moderate way. And I think that that's entirely possible You know, among the winners last night were not just Democrats, but also moderate Republicans who did reasonably well in their races. And I think if compromises can be reached in terms of moving forward with things that are pro-growth, a pro-growth agenda, that will be very helpful. I'd love to see a reestablishment of emphasis in this country on things like funding scientific research.