US Touts Iran Deal Prospects Amid Fresh Tensions in Hormuz | Balance of Power

Ajouté : 2026-05-26

[00:00:02]Bloomberg Audio Studios, podcasts, radio, news.

[00:00:09]You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5:00 p.m. Eastern >> on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[00:00:25]I'm Kaylee Lines alongside Joe Matthew here in Washington where it seems like we've been telling you a pretty similar story for weeks now. Stop me if you've heard this one before. Joe, the ceasefire between the US and Iran remains intact according to the US even as the US military is actively engaging in strikes against Iranian targets in the south. They say defensively. So there still obviously is tension and hostilities. Yeah. But a deal is close according to President Trump, just not close enough and can't be rushed and won't happen unless it's a great deal.

[00:00:57]>> Close enough to even expand the Abraham Accords based on a post from over the weekend. And this is where we start with Tyler Kendall at the White House is trying to track all the messaging coming from social media. The president himself when he speaks with reporters. Uh Tyler, the post of yesterday morning on Truth Social, was the 25th of May, just before 8:30 a.m. Negotiations with the Islamic Republic of Iran are proceeding nicely.

[00:01:26]It will only be a great deal for all. No deal at all. Back to the battlefront and shooting, but bigger and stronger than ever before. And nobody wants that. Has anything changed since that post? Do we have a sense of where the president's mind is?

[00:01:40]Well, Joe, at this point, the White House and other US officials, including Secretary of State Marco Rubio, have given updates that they do think that progress is being made on the diplomatic front towards what appears to be shaping up to be a memorandum of understanding.

[00:01:54]But still, the uptick and renewed fighting that we saw overnight definitely underscores just how fragile this situation is. Now, as you both just mentioned, the US says that it was acting defensively considering that Iran was laying mines near the straight of Hermuz. according to Sentcom. And while Iran has said that it is prepared to retaliate and that this violates the ceasefire, we also got indications earlier today that Iran is still maintaining that negotiations are ongoing. And that came perhaps through confirmation from Iranian state media that a delegation that arrived yesterday in Doha is uh staying there through today to continue talks on some of the biggest sticking points. And that delegation actually includes Iran's central bank governor amid what our understanding is talks about potentially unfreezing Iranian assets as part of what could be the first phase of a potential agreement. Now I say first phase because as you both well know it appears the US could be moving towards a phased agreement where maybe there could be this reopening of the straight of Hermuz. the US lifts its naval blockade and then we would see negotiations on any potential curbs around Iran's nuclear program and what happens to that stockpile of highlyenriched uranium. But uh Joe and Kaye at this point we haven't really gotten any tangible specifics from this White House on what could be included in that agreement and if we really are any closer towards that deal.

[00:03:16]I would point you to within the last hour, we did get this statement out of Sentcom denying media reports that Sentcom was starting to uh restart helping ships go through the straight of Hermuse, which leads us again to evidence that at the moment the situation is still very fragile and that waterway is effectively closed.

[00:03:35]>> Yep. Project Freedom has not yet been restarted according to Central Command.

[00:03:39]Bloomberg's Tyler Kendall live at the White House. Thank you so much. And with us to continue this conversation is Heather Connley of the American Enterprise Institute where she is a non-resident senior fellow. She's also former deputy assistant secretary of state for the Bureau of European and Eurasian Affairs in the George W. Bush administration. Heather, welcome back to Bloomberg TV and Radio. Good to see you here in our Washington studio as always.

[00:04:00]Uh our understanding based on what President Trump at least suggested over the weekend was that instead of reaching some kind of deal in the near term on Iran's nuclear program, it's going to be a ceasefire extension punting that issue until later. Would you describe that as a quote unquote great deal for the United States? Because the president says it's either great deal or no deal.

[00:04:21]Yeah, I mean I I think a great deal would be making sure that the nuclear dimension of the deal is upfront and this is the problem with the sequencing.

[00:04:31]Uh and it's that the challenge that Iran has the strategic leverage by having uh control over the straight that the first thing that they focused on is opening the straight which I think is basically um acknowledging that Iran will control that straight through a variety of means. So, it's not a great deal until we get that nuclear issue resolved. And if you put it to the end, uh what we've seen uh even in the Gaza ceasefire, those tough tough issues at the end, they just get they stay stuck. And I think that's the concern. The president needs to sell a a nuclear arrangement and the Iranians are not allowing us to put that up front in the sequencing.

[00:05:10]>> You you might have thought otherwise reading Truth Social over the weekend.

[00:05:14]Uh this again was yesterday, much later in the day. The enriched uranium, nuclear dust as he calls it, will either be immediately turned over to the US to be brought home and destroyed or preferably in conjunction in coordination with the Islamic Republic of Iran destroyed in place or at another acceptable location. Is this essentially him proposing this or or was that something that was discussed?

[00:05:37]>> Yeah, I mean this I again it seems to me that we just keep sort of inching or leaning towards the Iranian solution. Uh the Iranian Revolutionary Guard have said that HU that highly rich in uranium will not leave Iran. And of course the president was insistent it would come here or maybe go to another country. Uh we continue to bend. Okay. Well, maybe we can find a way uh to destroy it uh within Iran. Again, to do that would have to be incredibly intrusive into Iran. Um what conditions would would allow that? Even if we unear these canisters though, would we actually bring it all the way back to the United States, this incredibly uh dangerous and and volatile set of substances, or would we actually blow it up there?

[00:06:21]>> Right. And but to your point, we will find out what state it is in. Um and this is we don't know. We know the tunnels have been closed and crushed. uh this has been uh an issue for discussion originally like way back in the beginning it was you know to go to Russia that was you know said no then maybe to the US but you're right trans uh the transit of this highly rich uranium has to be done extremely carefully done under the most uh you know transparent and austere conditions of course >> well so obviously the nuclear program is one thing and these negotiations at least that we understood to be between the US and Iran with mediators of course uh the ones facilitating that conversation. But President Trump is also arguing that this is going to go potentially much broader than that as he seeks an expansion of the Abraham Accords. To quote him directly, he hopes that countries, including referring to uh Jordan for example, uh simultaneously sign on to the Abraham Accords, mandatory, he suggests that should be.

[00:07:21]And I just wonder how you think that actually fits into this puzzle here, Heather. So, I think the what the president's trying to do is reframe this is really a a reorganization of the Middle East that in part the June 12th 12-day war last year, this ongoing conflict is reorganizing this and to to create a win out of it, which would be trans I mean be transformational of having these countries uh recognize Israel. The challenge is we have to go back to Gaza again. um the the the war and really that has not resolved itself in helping a Palestinian authority create itself. Those countries will not be able to go forward in any way in my view with the Abraham Accords unless there is much greater pro uh progress in Gaza. You have today of the last 24 hours the Israelis continuing to to bomb uh Lebanon. They've just tried announcement to uh evacuate the Baka Valley. So we just have this is the problem. You can't resolve that big transformation until you resolve the Palestinian question and until you get uh the Iran issue into some containable element within the region.

[00:08:28]>> As long as Benjamin Netanyahu is is claiming to be pedal to the metal in Lebanon, can any of these other agreements take place?

[00:08:36]>> It it seems absolutely impossible. Uh and particularly because we have Israeli elections coming up in the fall. Um I think they're going to wait to see if there's some changes potentially there.

[00:08:46]And I think you saw uh in this flurry of diplomacy with the president speaking to all of these leaders as we headed into the holiday weekend um you know the Israelis are very concerned about being part of a deal that that really fences them in that they cannot take action with Jelie uh is is defensive and it just continues to uh erode the the hopeful stability that needs to come to this region desperately. Well, of course, Benjamin Netanyahu was not very satisfied with the original JCPOA agreement back in 2015. With the way things are tracking, Heather, do you think he's going to find more satisfaction with whatever the outcome is this time?

[00:09:24]>> Well, we don't know what this deal is.

[00:09:26]So, uh, but absolutely. I mean, again, if you start before this conflict, the straight of Hermuz was open. Now, this is a huge bargaining chip for uh the Iranians. We now have really pedled back on ballistic missiles on proxies. We're focusing on uh the the nuclear issue, but as we've discussed, where is that HU that highly risk uranium going to go?

[00:09:50]And at this point with this latest ceasefire violation, I think you're going to continue to see some reprisals both by the Iranians and the Americans.

[00:09:57]They're laying more mines. They're striking against US aircraft. This is not a ceasefire. It's, you know, it's a reduction in violence that can flare at any moment.

[00:10:07]>> So, you imagine the conversation that might be had tomorrow at Camp David. Uh, the president will be having a cabinet meeting. Apparently, it will be Tulsi Gabbard's last. Uh, they don't go up there for nothing, of course, in our remaining moment. What type of options might he be presented with?

[00:10:22]>> Yeah, I mean, there aren't really great options here. um he can continue to negotiate and the Iranians are continuing to have be very hardline and we're pushing towards them or the president can decide to take a much b bolder military option and open the straight take that leverage away from the Iranians. Um it's unpalatable uh both options and I don't envy him the task. The the intelligence agencies are saying that the Iranian capabilities are not as degraded as the president has said. So I think that is still uh a point of contention. How much did we really degrade?

[00:10:57]>> Really interesting as always. Heather, thank you so much. As we continue to ask Heather Connley questions that she cannot answer, even as non-resident senior fellow at uh the American Enterprise Institute, it's simply the world that we're in as we try to follow some very confusing messaging coming from both sides uh in this whole arrangement. We want to play this to the panel. Bloomberg politics contributor and Democratic analyst Jeannie Shanzeno is with us. democracy visiting fellow at Harvard Kennedy School's Ash Center, joined today by Republican strategist Lester Mson, principal of the international practice at BGR Group.

[00:11:29]Jeanie, with your thoughts on what takes place tomorrow at Camp David, the president at some point is going to have to make some pretty difficult decisions here and we've heard even from some Republican senators, beginning with Tom Tillis, but also others suggest that he's not getting good advice.

[00:11:45]Should we believe that the people surrounding the president are giving him an honest take on what's happening in the Middle East?

[00:11:52]>> Yeah, I mean we certainly hope so. But if those are the same people who got him into this war, then that he is not getting good advice. But we are here now. You know, there was a statement by the supreme leader in honor of Haj and he said the hands of time don't go backwards. And that's something we have to keep in mind. We are in a very difficult place right now. The US has three options. military maintain the status quo and that's a big problem for the international economy or negotiate a deal like the president is trying to do but if that deal puts nuclear questions as Heather was just talking about at a second or third round that is going to be a deal that benefits the Iranians the US and Donald Trump will have lost and that is a horrific situation for the US to be in. So, I hope he's getting better opinions and better advice now than he was at the beginning of this thing which got us here.

[00:12:44]>> Well, it becomes a question of not just the advice he's given, but whether or not he chooses to heed it, right, Lester? We've heard repeatedly that the one calling the shots here ultimately is the president. Are you getting a consistent message from him as in terms of what course of action he prefers?

[00:13:01]>> Well, not by the standards of other presidents to be sure. he has his own way of talking about these things. I do disagree with Genie on this and I might be a little bit of an outlier. I actually think the US is in a much stronger position than folks are willing to admit with respect to Iran. Uh Iran's nuclear weapons program has been devastated, is in a very different position than it was over a year ago before the first strike against it. Uh and that is the real threat to the region at the end of the day. A nuclear armed Iran is totally unacceptable. I think the president acted a couple last year and this year in a in a made some tough decisions to act against Iran's nuclear weapons program. So the fate of the of the enriched uranium here it really is the key. If he can negotiate with the Iranians to uh completely withdraw all of the enriched uranium out of Iran uh and that might take a couple of months then the US is going to be an even stronger position and so will the rest of the Middle East frankly.

[00:13:54]President said that negotiations with Thrron are proceeding nicely. Jeie, uh, we've only got about 30 seconds. Who is he talking to when he posts these or is the president projecting online?

[00:14:09]>> I can't read his mind. Um, you know, I think he's talking to the American public, asking them to hold on. Um, but you know, I would just go back to what Bob Kagan said in the Atlantic. One of the most significant military blunders and losses in US history. That is a real neocon saying where we are. There's a lot of ifs in what Lester said about if we get the uranium and all the rest.

[00:14:31]Neocons are now starting to say what a position we have put ourselves and the international economy in by giving them control of the strait which we have to remember they didn't have when this thing started.

[00:14:44]>> Just 10 seconds Lester. If we don't get the uranium is this a loss for the United States?

[00:14:48]>> No it's not. I think we're actually in a better position than we were before this started.

[00:14:53]>> All right, Lester Mson, Jeannie Shanzeno, our political panel on this Tuesday. That feels like Monday. Thank you both so much for joining us. There's more Balance of Power straight ahead.

[00:15:02]We'll get into the US munitions with Loheed Martin coming up next.

[00:15:06]>> Stay with us on Balance of Power. We'll have much more coming up after this.

[00:15:12]>> You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5:00 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App.

[00:15:22]>> You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg 11:30 >> on Balance of Power as we connect the dots between policy and Wall Street. And this next conversation is a pretty good example of that. As we've spoken so much about the DIB, the defense industrial base, and the need for expanding capacity to try to meet the needs of the Pentagon, knowing that we have spent an enormous amount of money and hardware in obviously our war with Iran, but also in trying to support efforts in Ukraine.

[00:15:59]Kaylee, it's been millions, billions of dollars worth of missiles. Not just offensive missiles, but interceptors that all need to be replaced. The Pentagon is now undertaking its largest mass production munitions commitment in decades. And this obviously could mean huge business for companies like Lheed Martin and its competitors who are facing an enormous amount of demand.

[00:16:23]>> Well, that's certainly the case. demand that has perhaps been heightened given the depletion of munitions we've seen in this conflict in the Middle East.

[00:16:30]According to Central Command, US Admiral Bradley Cooper, as of May 14th, the US had expended 13,629 munitions, stockpiles that will need to be backfilled uh if they want to be able to be deployed in future conflicts. But of course, Joe, there is there is a lead and a lag time to this. And it is all the conversation we want to get into now as we turn to Loheed Martin's president for missiles and fire control, Tim Cahill, who is joining us now here on Bloomberg TV and radio. Tim, welcome to Balance of Power. We appreciate you joining us. You of course uh last week just held a groundbreaking for an expansion of facilities in Troy, Alabama, building 47 uh where you focus on THAAD specifically, a number of which we know have been deployed in the Middle East in just the last few months and of course uh conflict uh elsewhere as well.

[00:17:20]We only have a couple hundred left of these according to reports. So how quickly can your new facility ramp up and get these back into the hands of the US military?

[00:17:32]Yeah. Well, first good afternoon Kaylee and Joe. It's pleasure to be here. Thank you. Well, so directly we are putting significant urgency dollars investment into building rapidly. And speaking of the THAD interceptor, of course, as you used as an illustration, the answer is we've already started to increase uh THAAD capacity out of the existing floor plan that we have at Troy, Alabama, and we're going to continue to do that. This particular expansion will double the size of the facility and will quadruple the number of TH that interceptors that we're able to produce. And if you if you're wondering about that math, you can see behind me some of the robotics and some of the high technology additive manufacturing systems that we're going to bring into play in Troy to do exactly that.

[00:18:18]>> So, when we think about Tim, and it's great to have you with us here. Uh, I'd love to know everything that's behind you in that in that shot. When we think about the incredible demand that's coming from the Pentagon right now, is it up to Lockheed basically to expand as quickly as you can to meet that demand?

[00:18:37]And is the Pentagon helping you do so?

[00:18:40]>> Well, so it isn't just up to Lockheed, which I'll get into, and absolutely the Pentagon is helping. In fact, the Pentagon is driving this and through their leadership in innovation and in our partnership with both Loheed Martin and all of our major and suppliers and their entire supply chain, we're all working rapidly to move at a pace that's never been moved before. Everything from contracting space to investment. We're already about a billion dollars into what will be a $9 billion investment into this ramp to requirements and certifications changes that going to enable us to move faster. So you can imagine every single element of this throughout thousands of subcontractors and through Loheed Martin as well and the department of war which is again clearly our partner in this. We're all hands on deck to make sure that this happens.

[00:19:27]>> Well uh as you consider uh that ramp up even with the assistance of the Pentagon are there still constraints to to the speed at which you can ramp up capacity whether in the supply chain or elsewhere? What are the headwinds facing this effort? Tim.

[00:19:42]>> Yeah, Kayla, that's a great question and and you can imagine if you have thousands of suppliers and tens of thousands of parts and you need every single one of them, anything can become a bottleneck. But to first order, absolutely we have we are addressing everything from material things like titanium, which is critical to the build of solid rocket motors, all the way through advanced circuit boards. These are actually pretty intelligent uh machines that we are building. They're not just simple ballistic rockets. And so all those components have to come together. And fundamentally what we are doing is in partnership with the department of war and all of our suppliers is that we are methodically going through every single choke potential choke point. Every single if you if you will iron bar everywhere where there is a potential for a a something that could hold us up. And we are trying to crush each of those things one by one. And whether it's getting materials faster, getting buildings built faster, uh whether it's looking for alternative places that we can get material that we haven't had before, or whether it's in contractual, again, contractual space, requirement space.

[00:20:46]There's a lot of places that we can work with the Department of War and our suppliers to find things to do more efficiently. And particularly now, I think it's all about the sense of urgency. How can we do this faster? And when you look through that lens, you may come to a different set of answers than you did before.

[00:21:02]Interesting. Uh you mentioned circuitry.

[00:21:04]Uh Tim, is Loheed in the business now of buying as many memory chips as it can get its hands on? Are are you buying CPUs as well knowing that there's so much demand from them coming from AI and so many other industries outside of defense?

[00:21:20]>> Yeah, Joe, we do do that in fact and and particularly in in places where we think that there might be a shortage in the future or whether something might go obsolete, we'll go do bulk buys. But effectively what we do is we look at all of the components again in the in the emissile system itself and pick what things that we might need to buy ahead, what things we might need to add additional emphasis on or incentives on, whatever the case may be. Each one of those components gets evaluated and we take whatever the appropriate action is.

[00:21:49]And in some cases, it isn't in fact buying parts ahead.

[00:21:54]Well, when we consider uh the parts you are are buying, Tim, and what they go into, we've had an ongoing conversation and and frankly, we've had it for years now as after Russia invaded Ukraine and drone warfare uh came to the forefront, but obviously we're seeing that now in the Middle East as well as we see these cheap Iranian Shahhead drones being shot down by missiles that are much much more expensive in the millions of dollars.

[00:22:16]How is Loheed thinking about addressing that asymmetry we're seeing uh on display in this current conflict? How do you do these cheaper and more efficiently for if there are uh enemies of the United States who can attack cheaper and more efficiently?

[00:22:33]Okay, that's a great question. So we are looking at systems everything from the very inexpensive quick deploy all the way through the highly capable systems such as that and and the PAC 3 MSE that we deploy which are going to be key still in the future because there's still those high-end highly capable missile systems that are going to deployed against our troops and potential population centers. But to the point of the less expensive systems, we even as we speak, we have some counter UAS drones system counter UAS systems for example that we have deployed out in the desert where we're using everything from small missiles all the way through lasers through microwave emitters all tied into something we call the Sanctum counter UAS system. It's actually been out in the desert for the last few weeks hitting targets and showing how it can rapidly knock down those shahed class drones with something that is more appropriate for it. and and we believe that's more appropriate as well. We don't advocate that you use something like a that or or an MSE against these these very cheap and quickly deployable threats that come out in in vast numbers. We absolutely need some of these cheaper systems. We're out deploying them like a lot of pe people are. It's all about uh applying innovation in AI, applying innovation innovate in additive manufacturing, bringing new technologies to bear oftentimes in partnership with some of these new entrance.

[00:23:52]The innovation that we've seen coming out of Ukraine is quite remarkable to the point where I I understand a number of defense contractors and maybe that includes Lockheed as well have traveled there to work with uh the Ukrainians who are basically building equipment in in garages and in basement to help knock down Russian drones uh to help swarm and deal with uh with this new technology.

[00:24:15]Are you impressed by some of the innovations that we're seeing coming out of smaller countries with fewer resources? And can you adopt them at Lockheed?

[00:24:25]>> Well, we're absolutely impressed. Um, these folks have done an incredible job in their country and we can absolutely adopt that and that's really what's critical. It's it's other countries that have been under stress that have had to develop these systems quickly and adapt quickly as the adversaries are adapting.

[00:24:40]It's the small new entrance that are coming in that are bringing in new technologies and new capabilities into the defense marketplace. It's a worldwide global endeavor, if you will.

[00:24:50]And so I think all the free nations are are collaborating together for bringing the best technology as fast as we can bring it and learning from whoever we can learn from. Uh we don't have a problem engaging with folks at any scale, any place on the world and and working with them to adapt what they have learned as well. That's that's how we all get better.

[00:25:11]>> Yeah, you're talking pretty favorably about the new entrance here, Tim.

[00:25:15]Bloomberg's reported that the Pentagon is looking at uh potentially different startups in the missile space, hypersonics specifically. Do you not see those as companies that are nipping at Loheed's heels?

[00:25:26]>> Well, of course, uh but you know, competition is good and the fact that first of all, we can bring in some of those new entrance and their technologies and we've been doing this for many many years. It's just that there was a small number of them. There wasn't tens or hundreds or thousands of them, but we talk to them all the time.

[00:25:41]We are we have new technologies that you'll be seeing announced over coming months that we are actually incorporating into systems right now that come from new entrance. We discuss uh potential uh partnership opportunities with them all of the time.

[00:25:54]They are pushing us as well and they are making us go faster as well. So they're making us better. We're making each other better. And so um we're not afraid of competition. You know we've been doing this for well over a hundred years in Loheed Martin delivering exactly what the customers asked us to deliver. Now, the customer is asking for something a little bit differently. They're asking us for speed and urgency and getting things to the field faster, and we're going to respond to that, and we will partner with any of folks out there who have capability and desire and and have that same sense of urgency and that same sense of mission. That's clearly still the most important is providing deterrence, protecting our troops, protecting population center, protecting our allies.

[00:26:34]>> Well, that's a great answer. Tim, I only have 30 seconds. I'm just deeply curious. Is the Pentagon the exclusive buyer of your goods or or those other governments deemed appropriate by the Pentagon? Like could I buy a THAAD system for my backyard?

[00:26:52]>> Uh no, I don't think you could buy a THAAD from your back for your backyard, but the US government would have to decide that so I won't speak for them.

[00:26:58]But it's absolutely a global market. Um THAADs we sell for to a number of countries. We sell them through the United States government with their approval. Pack 3 MSE is to dozens of countries and in fact across the board we have operations at about 60 different countries across the world. So this is a global operation supplying our allies as well as the United States is critically important to us.

[00:27:19]>> I guess I won't need one for the backyard. Tim Cahill, Lheed Martin, great to have you with us, sir. We appreciate your insights. I'm Joe Matthew alongside Kaylee Lines on Bloomberg. Stay with us on Balance of Power. We'll have much more coming up after this.

[00:27:36]You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5:00 p. p.m.

[00:27:42]Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App.

[00:27:46]>> Listen on demand wherever you get your podcasts or watch us live on YouTube.

[00:27:52]I'm Kaylee Lines alongside Joe Matthew here in Washington where of course uh it's not just any Tuesday. It's a primary runoff Tuesday in the state of Texas. We're going to have a lot of these now that we're in primary season.

[00:28:05]It was last Tuesday that we were in Georgia for that state's primary, but it was the day also a week ago today that President Trump decided to weigh in on the Texas Republican Senate runoff, throwing his endorsement behind the state attorney general, Ken Paxton, not the incumbent, fourterm senator, John Cornin.

[00:28:22]>> It's amazing. 24 years in the Senate, and it really could be up tonight. Uh, it is widely expected that John Cornin is going to lose this runoff to the MAGA alternative, the man who President Trump saw as more loyal, but many Democrats see as easier to beat. And that's going to be the question here is whether the candidate quality uh is enough to emerge from this runoff to not allow Democrats to flip the seat. Uh, we've got a couple of great voices lined up here. Julie Fine, of course, is our Texas bureau chief. She's going to weigh in from our Dallas bureau. And Dr. James Henson of the Texas Politics Project at the University of Texas at Austin will be with us as well. Julie F, let's start with you. Is this the swan song for Senator John Cornin?

[00:29:07]>> I mean, certainly we're looking at a close race tonight or it appears that way. I mean, Senator John Cornin certainly been battling back. As you know, Joe, he really wanted that endorsement from President Trump. He did not get that. That went to Ken Paxton.

[00:29:21]That naturally would give Ken Paxton the advantage. Ken Paxton, however, also was leading before that endorsement came out in the polls. So whether it's a swan song will really depend on how many people come out to vote and if people that didn't vote in the primary in the first place now come out for that runoff.

[00:29:42]>> Julie, can you just walk us through the financials here? The money that has been spent in this primary and in this runoff. Republicans spending money against Republicans.

[00:29:53]I mean certainly John Cornin raised a lot of money. This race is in the over $80 million I believe at this point and you haven't even gotten to the general.

[00:30:02]That is a serious question facing Republicans. Now John Cornin really outraised Ken Paxton. If Ken Paxton wins, it will show that all the money in the world didn't make the difference.

[00:30:14]But you're looking at a general election against James Talerico who has shown so far that he can raise money and that's all he's had to do the past few months.

[00:30:23]While the Republican candidates went after each other, James Terico could just continue to fund raise.

[00:30:30]>> There were a couple of other races that we're watching here uh the 18th district. Really something. uh Christian Meny who did his first broadcast interview right here on Balance of Power the day after uh the primaries going into a runoff here uh with Al Green.

[00:30:46]Colin all red in the 33rd uh trying to get back to the house.

[00:30:52]Colin all red pull this off. Julie Fine, you've been talking to him for a lot of years.

[00:30:58]You know, Colin Allred's people feel pretty confident going into this, but this certainly turned out to be a very nasty race. I mean, at one point, Colin Allred was actually backing Julie Johnson. Now, those two have really been going at it. Colin Allred has had a really interesting road, as you know. He chose to elect Congress, then he ran for Senate against Ted Cruz. He lost. He lost by a very big margin. Then he decides to go back for this newly redrawn district. So just by name recognition alone, he's been in politics a little bit longer on the federal level. However, Julie Johnson was also in the state house. Colin Alred's raised more money now. We'll see if that money goes to work for him tonight. But there's a lot of questions about what will happen with this district.

[00:31:42]>> Well, we just have a lot of questions in general. Just quickly, Julie, before we let you go, who are the voters that are showing up to vote today in these not just primary elections, but runoffs specifically? I would imagine this is a pretty small fraction of the Texas electorate.

[00:31:57]>> It's a pretty small fraction. One thing they all have going for them, it's an absolutely beautiful day here in Texas.

[00:32:03]It's not too hot and it is not raining.

[00:32:05]However, it's a small fraction that votes. Now, in terms of the primary, all the Democrats that voted in the Democratic primary, they cannot vote today. If the Republicans voted in the Republican primary, they can vote today.

[00:32:20]general voters can vote if they didn't vote in the Democratic primary. So really, one thing that John Cornin may be banking on is people that did not vote originally in the primary getting more interested as the past few men months went on. However, as you know, primary elections don't generally get a lot of voters and now you're looking at a runoff.

[00:32:42]>> Mhm.

[00:32:43]>> All right. Bloomberg's Texas Bureau Chief Julie Fine joining us on this runoff day. Thank you so much. As Julie mentioned, of course, Texas now dealing with a new congressional map this cycle, which has led to some interesting primaries on the Democratic side. It seems though, Joe, we won't get a new congressional map in South Carolina.

[00:33:00]According to NBC, the state senate in South Carolina uh shot down that redistricting effort. It has now failed in the South Carolina state senate. So perhaps we won't see Jim Klyurn, the incumbent Democrat in South Carolina's sole Democratic district, drawn out of that. Well, just keep your eyes on Truth Social because I have a feeling the president might have something to say there. That's a really important development here as we track the races uh today in Texas, knowing that this redistricting effort is not done or isolated to this cycle. We'll be talking about this going into 2028.

[00:33:34]>> Yes, indeed we will. But let's stick with 2026 for now and get back to Texas specifically as we turn to Dr. James Henson, director of the Texas Politics Project at the University of Texas at Austin. Dr. Henson, welcome. from uh to Bloomberg TV and radio. A week now since President Trump endorsed Ken Paxton for this Senate seat. Does that mean that the result today is all but guaranteed to go from him go for him? What does the polling bear out at this point?

[00:34:01]>> Well, I I think it's close to all but guaranteed. I mean, I I think throughout this race, we've been, you know, sort of adding the the caveat to the fact to to this race that John Cornin, you know, has not been the most popular Republican for a long time, yet as you pointed out, has served in office in one gu or another uh for for decades, literally, and has had that Senate seat for decades. Um, but Ken Paxton, I think to to really just look at the polling and to look at the dynamics in the party of the party in Texas, Ken Paxton is much more where the Republican primary electorate is at right now for for lack of a more technical term. Uh, John Cornin is, I think, widely viewed as kind of something like yesterday's Republican. And this is really, you know, even though the campaigns try to make it about ideology, is as much about style and and alignment with President Trump as it is about anything.

[00:35:03]What do you make of the way that Republicans are framing James Tal Rico?

[00:35:07]Uh, Dr. Ken Paxton's not waiting around for the results of this runoff. They're treating this like it's a general election already. and some of the names that were flying in Katy, Texas the other evening as he passed the microphone around to ask people to suggest nicknames. Tofu Tal Rico came up, Talafrico came up. You listen to what President Trump said about him on Air Force One uh just a couple of weeks ago. I guess it was last week as a matter of fact. A weird candidate, six genders, a real hit on Jesus. He's a vegan. The president said he pronounces it vegan. Is this stuff resonating in Texas?

[00:35:45]Well, I you know I I think this was pretty predictable. I think one of the things that was kind of lost in the Democratic primary when James Tarico beat Jasmine McCrocket was that, >> you know, he did have a very prominent public record taking a lot of very progressive positions and I think it was it was bound uh to come back in the general general election setting. So, look, I think this is about making sure that, >> you know, there's no Republican defections, which I think is not much of a problem. Um, but also to speak to more conservativeleaning independents as uh Republican operatives and and the Paxton campaign and its allies anticipate winning and anticipate a very Democratic year in Texas.

[00:36:34]uh playing on Torico's uh positions in the way that you're talking about and using this kind of Trump style, which I was of alluding to a minute ago, um are really all about making sure Republicans don't stay home and that there's, you know, not leakage among non-Republican voters when we get around to the general election.

[00:36:56]Well, and when we consider those general election dynamics, and again, it's not it's not a sure thing that John Cornin is going to lose this evening, but if he does, are Cornin voters more likely to switch their votes to Ken Paxton, vote for James Tarico, or just not participate?

[00:37:11]>> Well, we don't know that. I mean, I think that's one of the that's that's one of obviously the big questions. In some polling that we did in April at at UT Austin, one of the things we found though was that not by a huge margin, but by a slight margin, um Cornin voters actually were more likely by a little bit to vote um for Paxton than Paxton voters were to vote for Cornin in general election map matchups against Terico. So, I think one of the things that's been I think a little bit misestimated here going into the general election is the degree to which Cornin was obviously a better candidate for Republicans. Cornin is marginally more well-liked among uh some Democrats and independents, but it's really not a big difference. And actually, you probably have a bigger problem with Republican turnout if Cornin is the candidate than if Paxton is the candidate because, as I've said, Paxton is just much more in touch with where the Republican electorate is right now. That shows up in virtually all of the numbers. And that's the big dilemma for Republicans thinking about the general election, should Paxton win the election, is how do you weigh the need to make sure that Republicans don't lose morale in a very dem pro-democratic environment even in Texas uh in this election cycle versus what you might lose with persuadable voters. And I think it's just too honestly it's just too soon to tell. We're going to need to see what happens this summer with the economy where Trump is and what things are looking like after Labor Day.

[00:38:59]>> Well, with with that said, you were in the field in April. Uh but the Texas Politics Project poll finds in each matchup, Terico leads by seven points against Cornin, 40% to 33% and by an indistinguishable eight points against Paxton, 42 to 34. How should we read this then? This is Ter Rico's race to lose.

[00:39:23]>> Yeah. I mean, I I think I would not read it that way, honestly. I think what you have to do is look at the in when you look at those numbers is notice that if you look at by party breakdown in both of those matchups, Telerico versus Cornin, Terico versus Paxton, >> Terico gets virtually all the Democrats, 80% which is all given the tension level in April. Neither Paxton nor Cornin were were able to attract more than about 60%. I think one had 60 and Cornin had 60 and Paxton had 61. So stat statistically indistinguishable about 60% of Republicans. So the I think you have to read that lead for Taller Rico through the lens of the fact that that poll was conducted in the midst of this really personal deeply negative uh primary runoff. And so those numbers are going to move a lot between now and the fall.

[00:40:16]>> Understood.

[00:40:17]>> Just quickly, doctor, $130 million spent in this primary and runoff. Is it the money ultimately that you think will make a difference one way or the other or just the endorsement or lack thereof of the president?

[00:40:29]>> Well, I think if it was going to be the money, Cornin would be running away with it. So, it's pretty clearly not that.

[00:40:34]Um, you know, I I think, you know, as as your reporter said to some degree, Trump's endorsement was in a way pro-yclical. I think that there was a real sense that Paxton was in the lead.

[00:40:46]Um but but but the Trump endorsement really sealed that which is why the Cornin folks tried so hard to prevent that from happening as it turned out unsuccessfully.

[00:40:57]>> All right, doctor. It's great to have you. James Henson with us live on Bloomberg.

[00:41:03]>> Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already, Apple, Spotify, or wherever you get your podcasts. And you can find us live every weekday from Washington DC at noon time Eastern at bloomberg.com.