>> "washington journal" continues. host: looking at the week ahead in washington, the bloomberg

news congressional reporter is joining us. kevin mccarthy said he will sit down wednesday with president biden to talk about issues of the debt limit and the like. what are the positions of the two men and what does that mean going into the conversation? guest: the most important thing that happens this week. joe biden's position is the position that barack obama had in his second term which is that he will not negotiate concessions for releasing the hostage of the debt limit. kevin mccarthy, the new speaker, new house says you got to negotiate. that's how are democracy works and we've got to find compromises and we need to try to cut spending, reduce the deficit and come to an accommodation and a deal and what the republicans want ultimately is a deal that lays at a path to a balanced budget.

when you have $1 trillion in deficits, that's not likely to happen in the next few months. a lot of times, these negotiations start off with each side saying no at each other and then you get more and maybe you get closer to a deadline and people start getting upset at market start reacting and eventually, you get to some kind of accommodation. it's possible that other things get added to the debt limit like a bill and maybe the democrats will get some things and republicans will get some things. this is something that will be basically of big topic for the next several months until june when the first moment when we might actually hit that cliff. host: we some mitch mcconnell say last week that they seem to

be staying out of it. guest: that's what he did in 2011 back when john boehner was there with the new house. they were intent on cutting the deficit and they wanted to pass a balanced budget amendment to the debt limit, it was much more ambitious than what kevin mccarthy is talking about which is a more modest cap deal on spending. i think mitch mcconnell is in the wings and if the house is unable to get its act together and unable to pass anything, there is a chance that macconnell in the end could pick up the phone to joe biden and try to craft a deal that they think may enough folks in the house would fix it up. host: you and others at bloomberg had a story published about the options that the government may consider when taking care of these issues so what's the genesis of this story? guest: a lot of folks have been

talking about ways to bypass the house of representatives. it's very inconvenient with a house of representative that disagrees that you don't want to raise the debt limit. people are saying you could raise cash to keep paying the bills, one of which has been popular is minting platinum coins and there's an old law from decades ago that gives the secretary of the treasury to mint platinum coins of any dim emanation to theoretically meant a trillion dollar coin. then the federal reserve can credit our account and we can keep paying the bill. her problems with that. you have to figure at how to not have that affected by inflation. it's not really a great thing for economies around the world and it shake confidence in u.s. credit. it's not a great option but it

is theoretically possible with another option called premium bonds. this is a way to disguise the size of the debt. you basically would say we will issue new bonds we will pay an extra 100% or something in interest on those bonds. the value that investors would put on those bonds would be higher and they would pay a giant premium but that won't count against the -- against the debt limit. theoretically, you could find -- finance lots and lots of bonds. it's kind of a shell game and the $31 trillion debt would look smaller but in reality, you are in the exact same financial position, you still owe the $31 trillion, you've just gone through some games to look at dez to make it look smaller and you would potentially also have

the rest of the world saying is is not really we dish the economy we all put our money in. there is a potential that could cause higher interest rates because people would have less confidence. host: that story is on the bloomberg website. you can call and ask questions. legislatively, bills that could be debated this week both deal with the pandemic, one would in the public health emergency and the national emergency declared by president trump relit -- related to covid-19 so what's the messaging behind these bills? guest: basically, the house

republicans have several goals related to this and they are trying to say that the pandemic is over, that we should not still be using emergency authorities 2020, that federal worker should have to show up for work, they want to revert to the leap policies of 2019. a lot of federal workers are working from home these days. they call it does show up to work act. there is also one on vaccine mandates on health care workers. these are all things that republicans have been talking about campaigning on. the problem for them is they only have the house. most of these things are not going anywhere in the senate and even if they did, if you are repealing an executive order, you need an executive to sign your bill or else you need 2/3

to override. they don't have that. it's going to be interesting to see when people put out their pressed releases in their fundraising emails. you see that when the new house takes over. we've done all these things but until you actually accomplish a law, then it's just a well organized press release. that's for things like the debt limit and the big-budget fight later this year when the year expires september 30 and that to pass a law to give the government operating after that and a lot of these things are going to be in those fights. those are the two moments where you hit the debt limit and funding cliff where republicans have some leverage and they intend to use it. host: let's hear from our viewers, daly city, california,

democrats line. caller: good morning. i wanted to talk about the media, am i too late? host: that was the previous segment but if you have a question about what's ahead in washington this week, go ahead. caller: washington will always play its games and credit is that it and they are using it in america. they are always poor. that's my opinion for that, thank you. host: thank you. guest: when it comes to the u.s. credit, we have something called the 14th amendment where section four of that amendment says the edit of the united states shall not be west you and. it was passed after the civil war were there was some question how they would pay back civil war bonds and they wanted to put it rest to that. there are folks on capitol hill who say we would not default on

our debt because of that, the treasury secretary would prioritize paying back debt coupons. that is untested and it's kind of a risky thing to pay because we have a very -- the federal budget is very lumpy. we have some days when $50 billion is going out for social security checks and other days when money is going up or medicare and other days where you have to met -- make these debt coupon payments and those days don't always correlate when people pay their taxes. we have some months where we have surpluses and some months where we have giant deficit. the idea that you would manage and prioritize statements and have that make any kind of sense for any length of time beyond a few days would be very difficult. host: in maryland, independent line, you are next. caller: good morning. i don't need to be nostra donna's do not -- to be

nostradamus to know that it's democrats doing their best to govern and republicans doing performative nonsense. i just wish we would frame the actions is not one side and the other side when we literally have one group of people, one party in our country that fomented a coup and is still doing so, is antidemocratic and is not looking at the best interest of all americans. our news coverage, unfortunately, continues to cover things as on one hand on the other hand as if kevin mccarthy or any of these other yahoos are trying to govern this country. as an independent, my main source of perspective on this is the lincoln project. these are former republicans. they know the deal.

they know there is russian money and other corruption going on and, unfortunately, we continue to do the one side and the other . even on c-span, i wish there was some fact checking in real time whether it be when members come on and lie, democrat or republican. we really need some perspective here. happy country believes that climate change is real which is true -- host: you are putting a lot out there for air guest. do we expect these kind of things in a divided government when it comes to messaging bills? guest: i think there is a big divide in the congress and the country. people are talking past each other. we will have a hearing this week in the judiciary committee on

the border. the two porter -- the two borders approach this issue differently and it's hard to see them coming up with a deal and congress has failed to come up with a deal now for like 30 years. it will be another attempt this year in the senate where kyrsten sinema's working with republicans and democrats to try to cobble together a deal. it would be unusual if she were to succeed. there are certain things they have to come together on, even if they don't like each other, even if they think the other person is an insurrectionist or they don't like what somebody else has said. almost every year for 200 years, we have managed to pass a bill to fund the government so we will find a way to pay her bills. it's going to be messy and it's

always messy when you have a new divided government because people are testing their limits, how far they can go. in the meantime, even if you get close to some of these cliffs, it can have a big impact on viewers. if you are in the stock market you're worried about the on any and 2011 where there was a big hostage of the debt that might, consumer confidence plunged, markets freaked out, the economy took a hit. ultimately, they can up with a deal but they cut spending by $2 trillion over 10 years and some people think that was worth it. there are other people who look at that and say never again. we cannot be playing thermonuclear football in the economic sense. we didn't go over the cliff when we had those things happen. if we had, janet yellen, the

treasury secretary is warning of the big economic catastrophe, you would have a recession. it would be completely avoidable. at some point, things have to happen or else the government doesn't work. i think the viewers call -- i think there are a lot of folks feeling that way. yet these folks will have two meet and discuss and work things out. one of the great things about that building was the capitol dome, despite their messy fights every year, they eventually pass a bill. it will be a messy time before then. i went viral a few times on twitter pointing out the weight congress works is no like 100 times and they yes at the end.

this year will probably not be any different. in the end, we will have a deal. if you want to be optimistic, the deal might be a little less problematic than 2011 as far as the impact on the economy. the house is extremely closely divided, 200 22 republicans, 218 control the house. kevin mccarthy doesn't have a lot of margin. he really is under pressure from the right. we saw he barely became speaker but john painter had lots of pressure as well. there is also pressure from moderates this not as loud. they do not necessarily want to go over the cliff and they don't want to have the economy blamed on them.

they were elected in districts that joe biden one. what happened in 2011 is barack obama's popularity dropped a lot but so did house republicans. usually, when you are both staring at something that's bad for both of you, sometimes it brings together folks on some way out. host: let's hear from steven in montana come republican line caller: good morning and thank you very much. i've been watching for 50 years with urgency the continual breakdown of our economy since 1971. it's been a sadness that we all knew as soon as we lost control over our economy which is the gold and silver standard that

it's prevalent right now that the control of the economy has been manipulated and controlled by a constituency beyond the norm of understanding. as a result, we have had this raked down a very economy and a manipulation from the group situation that has extended to what we see today. we have this parallel -- not parallel -- we have this political pendulum that's been swinging back-and-forth from one extreme to the next and i've been watching this for 50 years. there is only one constituency that has had no change at all. those people we don't hear about. i have my experience and strength in hope in all that matters.

there will be no political answer to any of these problems because they do not want to establish two facts of our existence which is to establish truth and righteousness interactions. that is the only way we will establish justice in our whole civilization. host: thank you, caller. guest: the last time i heard the gold standard, there was a federal reserve nominee a few years ago who had previously espoused it and then she rolled back the idea. i don't think there are many members of congress that say we should go back to the gold standard. if you look at the federal reserve, they looked at 100 trillion dollars of personal assets by the american people.

there is no one who says that would solve her problems. up until a few years ago we had the pandemic, we had an unprecedented stretch of growth, low rates, low inflation and there are some good things and some not so great things about the current economy. we have the lowest unemployment rate in the long time so it's easy to find a job in many places. there has been inflation which is starting to come down. you are starting to see people with a higher interest rate that the fed has put in place to make some car payments, struggling with buying a house. those are issues i think congress will be looking at. theoretically, you can bring inflation down faster and then the federal reserve can take its foot off the gas and interest rates.

that can help the economy as well. host: we will hear from jerome powell this week to hear about the january numbers. guest: yeah, and if you look at the markets, they are starting to expect the federal reserve not to raise interest rates as fast or as much because inflation has been coming down. look at used car prices which are down a lot. some new car prices have been coming down as well. we will see what happens but what they that is absolutely sure if you look at what will come out of congress this year is that the era of being bipartisan spending deals where we spend more money, we've seen in the past six years" parties whoever is in control, that is on a pause, probably a multiyear pause like it was from

2011-2016. there will not be the votes in the house for a spending increase. i don't know the democrats in the senate will be expecting one. they are mostly playing defense to maintain whatever they got the last couple of years. the other big question include things like ukraine, house republicans are divided on that the american public is increasingly divided so we will see what happens with that as well. host: this is stephen dennis from bluebird -- from bloomberg news joining us. we will hear next from steve from south carolina, independent line. caller: good morning. it's an interesting topic. it's the definition of insanity, the same thing has been going on for years and everybody expected to change.

and the powers that be on both sides of the aisle, they are so irresponsible with us, the taxpayers money. it's like there is an endless supply. so they run the debt up higher, let's check of the taxes higher. with the amount of money spent on pork and nonessentials, it's sickening. the american public knows it's the season now and it's because of the media that was the previous topic. it's in our faces. you have to be blind not to see the corruption and this government has been going on for years area it's all about self gain. if the american people think when they talk in congress was good for the american people, they are in disneyland. they are not part of it.

it's about power. host: thank you. guest: members of congress want to get reelected and you don't have to do to be pulled to fight at what people want. spending more money on social security is very popular. would you like spend more money on social -- on medicare, that's very popular. defense spending is pretty popular. these spending programs say we should spend more. when you generate taxes that to pay for all that, they are generally unpopular. what ends up happening or what we've seen in the nearly 20 years of been covering congress and certainly before that is when the republicans are in charge or have power, they have

successfully cut tax rates again and again. those rates are lower than they were 30 or 40 years ago. democrats have wanted to increase spending and when trump came to power, he said he was going to get rid of the debt. he proposed a pretty austere budgets and instantly decided to increase spending, he increased defense, nondefense a lot, and he cut taxes as well. the deficit went half a trillion to $1 trillion which it is now. congress is reflective of the people's desires. you end up with deficits from people not ending on taxes.

it people decided to balance their budget and it they said cut these particular programs, and they could get those numbers to change so that more people want to raise taxes or cut areas government benefits, they would start reflecting that. they generally want to get reelected and these are the politics that will get them reelected. host: you talked about the new congress and one thing we saw play out last week was the removal of adam schiff from the intelligence committee. i want to play you of what his reaction was on cnn yesterday and we will talk about the third player in this what might happen there. guest: mccarthy has said adam schiff prosecute a case against trump and the ukraine impeachment was a hoax.

he gives 15 explanations in the only real explanation is he needs marjorie taylor greene's vote and he wants to retaliate for their removal from the committee and apparently believes i was effective in exposing his misconduct and trumps misconduct and that's what they are trying to stop. i think he benefits from having these smears repeated that's part of what he gains from it but this is a pretext and nothing more. host: that also leaves the fate of the democrat from minnesota up in the air. talk about what we might expect? guest: there has to be a vote on the house floor to remove her from that committee. it's not clear that mccarthy would win that boat. he's confident that he could win that vote and he has sent out many fundraising email saying i'm firing these guys.

it has become a cause for him. there are some house republicans were uncomfortable with this and i've talked to some who were not certain how they will vote. it's also the democrats making hey over mccarthy taking these people off committees while keeping george santos on committees when george santos has basically acknowledged a large chunk of his resume that he used to get votes or convince voters he had a strong resume was a fabrication. mccarthy was asked about that last week. he kind of bristled and implied that certain committees take matters seriously more than others. he's basically not going to take

action against george santos and let the x -- unless the ethics committee says he broke laws. santos continues to be the gift that keeps on giving for democrats. for the republicans, when you have 222 votes and unity 218 to control the house, every vote matters. santos will be with us. one thing i did last week as i changed things around. i went over to the house side and talk to him a few times and he's not answering questions about $3000 he would say he is enjoying being a member congress. those who think he's on the

verge of resigning are kidding themselves. you would think you be able to answer pretty weekly, yes it was the dying dog money or not. we will see if that happens this week. host: let's hear from willie in ohio democrats line. caller: thank you for allowing me to speak. the question i have is how in the world can you trust mccarthy? he has been wishy-washy on everything and he reminds me of a desperate man trying to go someplace but he doesn't know where he's starting. for taking people off the committee and allowing george sanchez to stay on the committee is insane.

you have to understand the budget is a trick. democrats want to raise it and they want the rich to pay their fair share. that's all it is. that got so much money that their money is going out with them. it's not hard. host: thank you. guest: i think the house republicans, one of the refrains you hear from democrats like chuck schumer last week is what is your land? house republicans have talked a lot about having spending cuts, no specifics. yesterday on cbs, kevin mccarthy took off the table doing medicare and social security cuts as part of the debt limit deal because it was becoming i

think a political albatross for republicans to keep talking about to the most popular programs in america. if you take them off the table, is less of the was talk about. if you are only talking about domestic discretionary spending, that's $800 billion per year out of the $6 trillion budget so you're not going to eliminate the trillion dollar deficit that way. you have to find some other things if you're not going to do taxes and veterans benefits, you run out of things to talk about. what will be interesting is they are tasked with passing a budget resolution. many times, congress just meets up and i don't think politically the house republicans cannot at least try to do that. they've got to get 218 votes for that.

you can always put a magic asterisk in a budget resolution because it's not real or a law, but if you junket up with magic asterisk,s imagine things we cannot name, it's a credibility hit. one thing they had going for them is paul ryan had been putting out budgets for years and he put out a budget. the budget -- his original budgets on social security and other things did what he wants to do but he had to compromise within the republican conference. they were kind of ready to be united and they were able to pass that. they had a much bigger majority back then. it's very hard to bring people together on a real budget resolution with a real proposed cuts. it's one thing that is clear is

house republicans conference is united in the general idea of cutting spending but they are very divided on whether medicare and social security should be part of it or defense, what kind of cuts he would want to do and how deep they would have to be before you vote for a debt limit increase. some don't want to vote on it at all. some want to cut spending 20% overnight and be done with it. i'm not sure they will be able to easily pass a budget resolution. host: he is a congressional