tv Bloomberg Markets European Close Bloomberg October 4, 2021 11:00am-12:00pm EDT
and alix steel. guy: monday the fourth. 30 minutes to the european close. what you need to know out of europe -- markets are down. let's talk politics. the u.k. chancellor says his government will not pursue reckless borrowing, but with the economy hit hard by shortages, is growth already starting? we will be live. the energy crisis dominating the energy financer -- energy ministers meeting. and also a warning that the airline industry will lose up to $200 million, wiping out nearly a decade's worth of profits. let's talk equities. gathering pace over here.
only down 0.3%. we are seeing significantly larger losses on the other side of the atlantic. we are continuing to see gas prices pushing higher, as you can see. alix: it is really turning into a messy monday. part of it will be idiosyncratic. facebook really weighing on the nasdaq 100, the biggest loser of the day, off by two percentage points. moderna also getting hit hard for a second day, weighing on the nasdaq 100. the s&p dropping like a stone after your factory orders and capital goods orders, even though i did not see anything in the numbers that would necessarily trigger a decline. all the indices in the red with the exception of energy, are performing as we have an $80 handle on the brent energy index, up one point express at a the only stocks in the s&p, in the green, williams, shale players. the 10 year yield interesting. yields up still to basis points.
it was up by 4. you're still not seeing the safety bid within the 10 year market you would have thought. it now comes to do you buy the dip? it will take a couple of days. guy: if government bonds do not balance your portfolio of debt and equities are going down, why have them in your portfolio? it is a question that p.m.'s continue to ask themselves. let's stick with the energy theme and what is happening with inflation. european -- it could just be eurozone, but i think it is european -- ministers meeting in luxembourg. france and spain calling for coordinated response. they spoke on the sidelines of this meeting in luxembourg. >> what we see is an
unprecedented spike in energy prices, due to different reasons but which is very much linked to energy prices in international markets. this is not an issue we can tackle at the national level. we need a european coordinate response. >> we do not want to be a pendant on supplies coming from a foreign country. that is the core of the french model. >> we have to look very carefully and fast at the situation, that it will not get that out. of course, we have to support the households to survive if the situation is changing, like a crisis. >> if we want electricity and other chastity supplies without committing more co2, we strongly believe that nuclear production is one of the key responses we could give to that situation. >> we should react but not overreact. because we have a strategy which is essential for the future of
our economies, not only for the life of the planet. guy: let's get the latest from bloomberg's maria tadeo, on location at the event. a lot of words there about needing to deal with this issue. will there be any coordination, and if so, how would that ordination work? -- coordination work? maria: this is clearly the topic, all about energy. everyone can see this will be a rough winter for europe. it is interesting. when i spoke to the french finance minister -- domestic mergers, and a number have already been taken, -- that the european union needs to take a much bigger approach, whether this means buying in bulk or negotiating another contract. they made it clear that, going forward, this is not just about
domestic measures. it will have to be on a much bigger perhaps e.u. 27 agreement. the bigger issue is european countries have different ways of energy markets. and france was taking the opportunity to say that maybe the french model has the answer, which is the future nuclear energy much higher in their own nuclear mix. alix: i cannot imagine 27 countries collectively trying to buy lng, for example. for a look at what is impacting european markets, i want to go to esty dwek, flowbank cio. how do you -- esty: that is the question. we have known that inflation will be higher than expected for longer than expected. this is just another layer that will extend the rise in
inflation. this does seem to be rather transitory in terms of the energy crisis, but you still want to look at it. some areas of the market, like energy, are benefiting. we have talked about energy and material for a number of months already. that is one area to look at it we have kept an eye on breakevens. one of the better ways of having a little bit of a hedge for the bond side of your portfolio. beyond that, it is just trying to look through some of the noise, some of these reactions, and thinking through to what the growth outlook is going to be like, how different governments and central banks are going to react, and try to stay positioned as long as the outflow does not materially change. guy: maybe this is transitory, but we throw the word "transitory" all the time. it is not defined. transitory can last a wild.
i wonder at what point investors will say actually, yeah, it will be something we have to live with for a while. it may just be this winter when it comes to energy, but shortages of delivery drivers, materials, they feel much more permanent at this point. just judging from my own anecdotal experience, talking to companies about when things will be available. esty: it is a concern. and transitory is turning into a number of months turning into quarters, not a question of the very short-term. i do think the zero covid policy we have seen across most of asia has exacerbated some of the supply chain shortages. as we continue to move on from the pandemic, these should start to ease and we should start to have improvement. we also saw a much quicker rebound and recovery in terms of the global economy, and businesses just were not prepared, given how deep in the
pandemic we were before that. so a number of different areas, factors that are weighing in here. we do have to be prepared for this to last a little bit longer, but i am not sure it changes the growth outlook that much, which i think has actually been stronger than expected, and recent economic data has shown that as well, and that means the market picture, in terms of equities and risk assets, stays constructive. alix: is that because of how consumer demand and balance sheets are still good, or is it because the supply changes indicative of consistent, stronger demand? what gives you that confidence? esty: it is a combination of both. but when you see the trillions in excess savings in the u.s., where we will end with something between $2 trillion to $3 trillion of additional spending over 8 to 10 years, not on the
scale as a what was during the pandemic, but when you combine that with the conciliation packages -- reconciliation packages, we will have some there. it is difficult to imagine a negative growth scenario when you have so much cash and so much will to us and. -- to ascend. guy: what do you tell clients about having government bonds in their portfolio? is this transitory phase of inflation lasting longer than expected, we continue to find ourselves in a situation where these bonds just continue to make losses after losses after losses. it is something investors have had to deal with for a while, but it feels particularly germane to talk about it, given that we do have inflation spiking, yields are picking up, but they are way below where inflation is. esty: absolutely. and i think this will be a question for the next five or 10
years. when you have such low yields as a starting point, what do you do with your bond allocation? for institutional investors, it will be an even bigger conversation. i think some of it depends on how overweight or underweight you have been and for how long, how much pain you have taken already. it is difficult to not have it -- to not have any at all. at the same time, if you are thinking within an asset allocation, it is clearly the asset you want to be underweight in and then a bubbly favor credit or short duration credit to get the yield pickup instead. alix: a quick question before we go. if you go value, you have to going to europe -- how sticky do you think that is? esty: i think we have seen the bulk of the catch up for now at least. if inflation stays higher and growth stays stronger, it means it can continue, but we probably do not see the strength of this
reflation trade like we saw at the end of last year after the vaccine announcement. but i do think there is a bit more. guy: great stuff. nice to have you on the show. esty dwek, flowbank cio. the tory party conference, the conservative party conference officially underway. berkeley's -- barclay's chief u.k. economist breaking down the impact of what we are hearing. this is bloomberg. ♪
cost. whilst i know tax rises are unpopular, i want tax cuts, but in order to do that, public finances must the playback on a sustainable footing to the worst part of politics are driven by fear. we will do whatever it takes. i remember, over five years ago, being told that, if i backed brexit, my political career would be over before it had even begun. well, i've have put my principles first, and i always will. i believe in fiscal responsibility. just are willing more money is not just economically irresponsible, it is immoral. guy: sunak saying the -- some are saying the u.k. going back to the late 1970's. rishi sunak, in some ways, kind of talking about that era, talking about what was delivered
post 1979 and thatcher's view on the economy, the supply-side stock she delivered. let's go to the conservative party conference in manchester. bloomberg's tom mackenzie has been covering the event all day. in some ways, that is what we heard from the chancellor today. in terms of what -- how it was received inside and outside the conference hall, what has been the reaction? tom: that divergence is really interesting. the chancellor of the exeter -- exechequer, rishi sunak, received a standing ovation. in some ways, he is looking through the challenges their country is facing now to the longer-term benefits he says comes with brexit and retooling the workforce, building on what he describes as the success of keeping unemployment relatively
low during the pandemic. all of this happening -- and this is the dichotomy -- given that in parts of the country, there is a sense of crisis, the second week where you have fuel footages, the military on the road trying to deliver fuel, some supermarket shelves md, energy crisis, that is all real. here, the focus is on trying to move forward. there were no major policies from the chancellor of exchequer , but he did say he wanted to ensure britain's finances got onto a more sustainable footing. he pointed out that the gdp is close to 4%. we know the economy is not back to pre-pandemic levels. that will be something of a note to not only the party but international investors of concern. you have seen yields rising, inflation at the highest level in almost nine years as well. so that nod to investors.
you also heard the prime minister as well. he will give the major set piece , but he was being quizzed about the cost, labor shortages, wages. he said we want to see an economy where there are higher wages and we have a higher skilled economy. but that is not looking at the short-term, it is looking longer-term for the u.k. but it is also a prime minister and a party that continues, despite all these challenges, top-hole -- to poll significantly ahead of the labour party. they also have a majority in the houses of parliament. we also spoke to the trade secretary. she said they have not ruled out taking -- getting a longer-term trade deal with the u.s. guy: thank you very much indeed. great to see you sticking around for us at the conservative party conference. let's stay with the u.k. economy. we welcome fabrice montagne, barclays' chief u.k. economist.
i am wondering whether we will see the economy slow down sharply and make that even harder? fabrice: you are right. there are two ways to balance the books. either you reduce the deficits or you inflate activity and gdp, and it seems the u.k. stands out in the path that has chosen for its public finance. fair enough, we have to look through some of the rhetoric from the ongoing meeting, but clearly, the direction of travel is to get a grip on spending, to reduce the footprint of the government. in a way that other countries, especially the main partners of the u.k., are not doing. europe is deploying an aggressive medium to longer term funding package for climate change transition, energy, etc., while the u.s. as well is voting on that part of spending. and here we have a chancellor that basically what he says is
the government will retreat evermore in the years ahead and reduce the size of its footprint on the economy. so there is a clearly differentiating practice that the u.k. seems to embrace relative to others. alix: at the same time, talking about diverging, the markets are fully pricing in three rate hikes by the end of 2022. how does that make sense? fabrice: we have a treasury very focused on fiscal sustainability , the risk to public finance, that necessity to have small deficits. it seems we have a central bank equally worried about its credibility, whether it is inflationary fighting credential or what is value of the pound, whatever it is. so we get from the fiscal and monetary signals that policymakers want to make a point that they are doing the right thing, the sustainable thing, the credible thing, even
if that means coming across as really restrictive. we might be facing a policy mix, fiscally and policy wise, that will be very -- guy: absolutely. you have some calling -- and he -- and you have a restrictive side to the supply-side economy. what is happening with the fuel shortage may be a short-term phenomenon, but there are shortages in many sectors across the u.k. economy. can you walk me through what impact all of these factors could have on gdp over the next 12, 18, 24 months? fabrice: well, none of the shots you mentioned are gdp enhancing. all of them are drags, some may
be drags on inflation. we will have to look at whether there is good inflation there. but even that, it does not seem to be really good inflation whenever we talk supply-side shocks or energy. it is a wall of worries rolling towards the u.k. we hear a lot of these kind of fiscal and monetary restraints or restrictive approaches from countries unsure about the credibility and the standards in the global economy, and usually the victim is gdp or high unemployment. so the paradox of all of this is that the u.k. does not have a problem of sustainability. the bank of england does not have a problem of credibility and fighting inflation. and still, we hear a lot of that rhetoric coming from the treasury on one side, the bank of england on the other side. it is less about what i think will happen then what both sides will do, and it seems restrictive on both ends.
alix: do you feel the fx market, for example, the bond market has priced for this kind of scenario? fabrice: it is hesitating. to be honest -- i did a chart for the 2016 conservative party conference. back then, the motto was no deal is better than a bad deal. the market hesitated and priced something that looked like a country risk premium, meaning asset prices went down, rates went up. last week come up for a couple days, we had that same dynamic, where the pound went lower, domestic equities underperformed, and rates shot up. it is never that clear-cut. there's always a balancing effect in the u.k., because you have investors ready to step in and, to some extent, by the pound, because there is a belief that, after all, the u.k. is still a place to -- and it is never as clear cut.
and also because the u.k. does not really sure all the features of an emerging country. but to answer your question, the market sometimes hesitates to trade the u.k. in a much more volatile way than other developed markets. alix: really interesting. so insightful. thank you so much, fabrice montagne. about seven minutes until the close of trading is over in europe. this is bloomberg. ♪
the cac 40 down by about half of 1%. technology is something of a laggard today. that gels with what we are seeing stateside with the nasdaq under pressure. it is the energy story on both sides of the atlantic that is proving to be the big driver. brent north of 80. ti moving up through the 70, 75 level come on the back of what is happening with opec. what will we do next? the close we will also talk about what is happening in the aviation sector. talking huge losses for the sector. what message does that send to the investments sector? ♪
the comfortable way to work out. -that looks fun actually. -looks like a paisley. -hey, a paisley, we'll take it. -yeah. oh my god, i could do this and watch tv at the same time. -exactly! -fantastic. oh yeah, i can do this. this is easy. and definitely better than the floor. -it feels sexy. -it feels good. i want this in my house. (host) wondering if the aerotrainer is tough? (engine revving)
things not particular pretty but better than the united states. technology is the laggard. a big impact on the dax. names like infineon and delivery hero acting as a break on that market. the cac 40 down .6%. the ftse fairly flat. energy stocks doing fairly well. brent crude up nicely. the mining stocks doing relatively well. it is insulating the ftse from the wider market mayhem. let show you what is happening in terms of how we progress. we've been rolling over quite sharply. you can see the effects towards the back end of the session in europe. that is the move out of the s&p. we have been tracking sideways but not by that much. we are on the precipice.
we are not that far away. in terms of assets affecting their their -- assets affecting the narrative, the pond -- the pound responding sharply. we have seen an earlier move in u.k. net gas fade, but we are seeing brent crude very well bid. 81.60 on the back of what is happening with opec. you wonder whether the sale will come under pressure in terms of pumping more and pushing prices down. let's work away through what else is happening. we have the sector breakdown. i can give you idea what is going on. energy and the telecom sector looking fairly healthy. food and beverage doing ok. health care fairly flat. technology, travel come the industrial sector, that is where the weakness is found. i mentioned the telecom sector. more competition in the u.k.
market in terms of the fiber rollout. you could be seeing sky hooking up with the o2 network. basically we do not know which way the permutations are going to end up becoming reality. the potential for consolidation within the media/telecom sector in the u.k. looks like it is growing at that could weigh on bt group. morrison supermarkets, i think the market was unimpressed what it got from that option. morrison is trending lower. the u.k. supermarket sector is getting interesting right now because of the shortages we are seeing, because of the competition for assets like truck drivers ahead of christmas and also there is talk that was mentioned in the sunday times. one of the u.k. papers talking about a bigger return for shareholders from the company.
the airline sector is broadly positive from the iata investment taking place in boston. i'm not sure right heirs member but it stopped up 2.21%. -- i'm not sure ryanair is a member but it's stock is up 2.21%. alix: that is using your bitter you cannot get to boston for the airline conference. the overall losses for airlines from the coronavirus pandemic could top $200 billion. joining us for more is john strickland, consulting aviation analyst. that will wipe out years of profits for these guys. when do we have a complete picture of how bad it is going to be? when will the bottom hit? john: hopefully we have already reached the bottom. it all sounds scary.
it is a relative improvement on the previous year. we have seen some improvements this year, not least where you are in the u.s. domestic market of those strong domestic markets such as china and russia being much more buoyant. we are waiting with bated breath for the reopening in early november of the very important long-haul transatlantic market between europe and the u.s. and good news about australia. the experience by airline varies according to the circumstances and each one you look at. those are exposed to long-haul are the hardest hit because of the long-haul flights, certainly for traffic -- for passenger traffic. short-haul carriers are those exposed to the markets -- guy: i know you do not cover the airline sector from an investment point of view, but this is 10 years worth of
profits that have been wiped out during the pandemic. what message does that send about the economics surrounding the sector, particularly as we are going to continue to have to deal with the pandemic fallout, we are going to deal with the green energy transition. we do not know what that is going to mean. how solid of footing is the sector on from an investment point of view? john: you are right to point that out. it has long been a fragile sector. william walsh is heading up iata. the last group he was heading up was iag, one of the better placed airline groupings. you mentioned ryanair come easyjet, these low-cost groups in europe's had learned lessons over the year in close and scrupulous cost management.
that is not probably adopted industrywide. i should mention lessons learned in groups like air france and klm. all of those are in much more difficult segments. smaller airlines in markets regional always have a tough time and it is a sector prone to government taxation and understandably in the spotlight for an environment that will bring issues of cost and credibility the industry has to address. alix: it feels like it is easy to look at the government bailouts we have seen as a covid thing and hopefully they can start making their own money and then it will be fine. i want to pivot off of guys point as we transition into a world where sustainable aviation fuel is by no means prevalent and at some point we will need
-- we will need new planes. is this nationalization of the airline industry something that will keep happening? john: if they know what we've been seeing there many visual examples of the impact of climate change across the globe this year in particular. we hear a lot of discussion in the course of the next few days at the iata event of the seriousness with which the industry is taking this. i recall the baton for the environmental issue on the iag when he was leading that company and he is taking that into serious policy now equal to covid. is not using covid as an excuse to allow to be pushed back. new technologies such as hydrogen and electric are long way down the line. decades of research. we will start things now like
better air traffic management and the use of sustainable fuels. guy: they can, but we do not have the capacity to do that from a production point of view and we are years away from making that happen. in the meantime, we have nationalized lufthansa and nationalized air france. in reality this is what has happened. what does europe need to do? it has not had the consolidation in the united states. kennett build balance sheets, can the european aviation sector build its balance sheets back to put them on a stable footing at the same time as making the energy transition at the same time as allowing these airlines to exit from affective nationalization? john: it is a very big ask, but there is no choice. we looked at some of those airlines. iag has managed to avoid taking government funding. europe is still relying on its
own resources and already was leading the pact on the green agenda. we look at lufthansa which took quite a chunk of government funding, not only from germany but from other countries. lufthansa has just done a big rights issue. air france klm a bit different. a bit murky. how much government will stay in that airline group, having funded the french government and the environmental stipulation into that funding. it is a mixed picture in terms of airline freedoms. the local carriers are out there having just had a successful rights issue at ryanair. very cash flush relatively speaking given the depth of the crisis. we are seeing new aircraft which are more fuel-efficient such as
the 737 max in the case of ryanair or a320 in the case of other airlines. we need to see a much more cooperative and collaborative approach from governments. this is the message we will hear from willie walsh. we need a lot of investment to speed up the process into the future. the sector cannot fund that all on its own. guy: always a pleasure. nice to speak with you. john strickland, gls consulting aviation analyst. a look at where the markets have wrapped up the day. the ftse 100 faring a little bit better. still furthering -- still flirting with the 700 level. the dax being hit by technology names. the cac 40 down .6%. guy: here in the u.s. -- alix: in the u.s. we are waiting for president biden to speak on the debt limit any mimic.
i want to bring in mario parker. what are we expecting president biden to do? mario: president biden is taking his pitch to the american people to ask for help to pressure some sort of bipartisanship in washington between the parties who are engaged in a very dangerous game of chicken. guy: in terms of the data we have on the agenda, we are trying to figure out which is the one we need to be focusing on. halloween seems to be emerging as a key line in the sand. give us the schedule we are working with. mario: i think the safe pick is halloween for a deadline. prospects for a default range anywhere between october 18, give a weaker two or so in terms of projections, that is when the u.s. would hit that. halloween is now the big date.
however, chuck schumer is out with a letter to his colleagues saying the essence. be prepared to work throughout this weekend to get some things to the president's desk. guy: we heard -- alix: we heard senator mitch mcconnell told president joe biden that he should pressure the democratic leaders to raise the debt ceiling limit because the gop will not cooperate. the democrats have made it clear they wanted a bipartisan vote on this, saying the republicans are in part responsible for racking up this debt, they have to be responsible for raising the ceiling, in which way do you think the pendulum will wind up swinging? mario: republicans are betting that the party in power, which are the democrats at this point, will be the ones to receive most of the blame, regardless of whether the debt ceiling has been something accomplished through bipartisan measures in the past. the letter you mentioned,
senator mcconnell also reflected president biden's time in the senate, saying when george w. bush was president now president joe biden did not support republicans in raising the debt ceiling. guy: thicker and thicker. thank you very much. thank you for your time and the continued reporting. mario parker joining us. it seems the president may still be a few minutes away. when he speaks we bring you his comments. this is bloomberg. ♪
pres. bi what congress is doing today isden: reckless and dangerous -- pres. biden: what congress to doing today is reckless and dangerous in my opinion. raising the debt limit is paying what we have already acquired. the united states is a nation that pays its bills and always has. we have never defaulted. what we pay for keeps us a great nation. social security benefits for seniors. salaries for brave servicemembers and benefits for veterans and other financial obligations for our people and our nation. we make these obligations -- we meet these obligations based on
the revenue from taxes and the ability to borrow when needed. in that case we are able to borrow becays pay our debt. we always pay will be oh. we never failed. that is america. that is what is called for. it is called full faith and credit of the united states. it is rocksolid, it is the best in the world. here is the deal. there is a cap call the debt limit that only congress can raise or lower that debt limit. let me be clear. raising the debt limit is about paying off our old debts. it has nothing to do with any new spending being considered. it is nothing to do with my plan for infrastructure or building back better. zero. both of which are paid for, i might add. if we are going to make good on
what has already been approved by previous congresses and previous presidents and parties, we have to pay for it. social security benefits. salaries for servicemen and women. benefits for veterans. will have to raise the debt limit it we will meet those obligations. raising the debt limit is usually a bipartisan undertaking. it should be. that is what is not happening today. the reason we have to raise the debt limit is because of the reckless tax and spending policies under the previous trump administration. in four years, they incurred nearly a trillion dollars -- nearly $8 trillion in additional debt in bills we have to now pay off. that is more than a quarter of the entire debt incurred now outstanding after more than 200 years. republicans in congress raise
the debt three times when donald trump was president and each time with democratic support. they will not raise it now that they're responsible for more than a trillion dollars in bills incurred in four years under the previous and ministration. that is what we would be paying off. they will not raise it even though defaulting on the debt would lead to a self-inflicted wound that takes our economy over a cliff and risks jobs in retirement savings, social security benefits, salaries for service members, benefits for veterans and so much more. failure to raise the debt limit will call in to question congress willingness to meet our obligation that we've already incurred, not new ones. this would undermine the safety of u.s. treasury securities and threaten the reserve status of the dollar as the world's currency that the world relies on.
the american credit rating would be downgraded. interest rates will rise for mortgages, auto loans, credit cards, and borrowing. folks watching at home this is the republican position -- folks watching at home should know this is the republican position. they will not raise the debt limit to cover their own spending. democrats voted with them to cover that spending. they say democrats should do it alone. then they are threatening to use a procedural power called the filibuster, meaning we have to get 60 votes, not 50 votes to increase the debt limit. this would block the democrats in meeting our obligations. let's be clear. not only are republicans refusing to do their job. they are threatening to use their power to prevent us from
doing our job, saving the economy from a catastrophic event. i think it is hypocritical, dangerous, and disgraceful. there obstruction and irresponsibility knows no bounds, especially as we are clawing our way out of this pandemic. democrats will meet our responsibility and obligation to this country. we are not expecting republicans to do their part. they made that clear from the beginning. we tried asking. we are asking them not to use procedural tricks to block us from doing the job they will not do. the meteor is headed to aggression to our economy. democrats are willing to do all the work of stopping it. republicans have to let us do our job. just get out of the way. if you do not want to help save the country, get out of the way so you do not destroy it.
we do not have time to delay with elaborate procedural schemes which republican proposals require. scores of votes without any certainty at all, many of which have nothing to do with the debt limit at all. that is when accidents happen. in the days ahead, before the default date, people may see the value of their retirement account shrinking. they may see interest rates go up which will ultimately raise their mortgage payments and car payments. the american people -- let me say it this way. as soon as this week, your savings and your pocketbook could be directly impacted by this republican stunt. it is as simple as that. republicans say they will not do their part to avoid this needless calamity. so be it. they need to stop playing russian roulette with the u.s. economy.
it is one thing to pay our debts already acquired. it is another to require a supermajority to pay the debts already acquired. it is not right. let the democrats vote to raise the debt ceiling this week. without obstruction or further delay. democrats in the house have already passed a bill that would do that. it is sitting in the united states senate where democrats have the votes ready to pass it. that is the only way to eliminate the uncertainty and risk that will harm american families and our economy. let us vote and end the mass. -- end the mess. we have to get this done. we must get this done. it is playing russian roulette to play these games. we can do it this week. get out of the way and let us pass it. thank you. >> senator mitch mcconnell says he sent a letter to you explaining this to you.
have you received that letter and how dire do you believe this is? pres. biden: i did get a letter 10 minutes before i walked in here. i read it. i plan on talking to mitch about it. he and i have been down this road once before when i was vice president. i hope we can have some honest conversation about what he is proposing. i think the easiest way to do this, and if the republicans would not use the filibuster, would be to let us vote on what is already in the senate right now, passed by the house, to raise the debt limit. we could do that in the next several days. >> you've often touted your experience in the senate, you're 36 years in the senate, talked about your ability to be a closer on deals involving legislation. why were you unable to close the
deal with members of your own party on key parts of your legislative agenda last week? pres. biden: i was able to close the deal on 99% of my party. two people are still on their way. i do not think there has been a president who has been able to close deals that has been in a position where he has only 50 votes in the senate. it is a process stop we will get it done. >> that sounds like you're putting the blame squarely on two u.s. senators. pres. biden: i need 50 votes in the senate. i have 48. >> leader schumer has vowed not to raise the debt ceiling
through the reconciliation process. ultimately, if push comes to shove, what is more persistent -- what is more important, the position senator schumer has or raising the debt ceiling? pres. biden: i will not answer on the debt so we do not confuse the american people. the issue of reconciliation, which is like code to the american people, what is reconciliation. there is a process that i understand the republican leader is willing to initiate and go through that would require up to hundreds of votes. an unlimited number of votes having nothing directly to do with the debt limit and everything to do with ethiopia to anything else that has
nothing to do with the debt limit. it is fraught with all kinds of potential danger from miscalculation. it would have to happen twice. you could literally have several hundred votes over the next number of days, everything else would come to a standstill, but you still find yourself in a situation where at the end of the day you may have passed something that has to be undone again by democrats or republicans. it is an incredibly complicated process when there is a very simple process sitting out there. sitting at the desk in the united states senate is a bill passed by the house saying we democrats will raise the debt limit and take responsibility for raising even though we did not vote to acquire the debt as well. we will do that. that is the way to proceed. >> [inaudible]
pres. biden: i -- >> regarding her bill back better agenda, we know that -- regarding your build back better agenda, we know the top line of joe manchin is $1.5 trillion. senator kyrsten sinema has yet to give a top line of how high she is willing to go. what is her figure? pres. biden: we are in negotiations. i'll let her tell you that. >> is it higher than the $1.5 trillion? pres. biden: i will not negotiate in public. >> how is what the republicans are doing now any different from when you opposed raising the debt limit as a senator. pres. biden: we were not
calling for a filibuster. it was a straight up-and-down vote. >> you talk about how you have 40 democratic voters. the other two have been pressured over the weekend by activists. joe manchin has people on kayak show up at his boat. senator cinema was chased into a restroom. pres. biden: i do not think their appropriate tactics but it happens to everybody. the only people it does not happen to our people who have secret service standing around. it is a part of the process. >> a lot of people have been trying to attach immigration -- >> i know you don't want to comment on positions in the negotiation, but what you think the size of the reconciliation packet should be. pres. biden: i laid out what i thought it should be. it will be less. look. the legislation, both the bill
back better peace as well as the infrastructure piece are things i wrote. these did not come from bernie sanders or aoc or anybody else. i wrote them. i disagreed with medicare for all that i laid out what i thought would be important. i think, in the bill back better program, it is required we have the best education available to us. i'll be speaking to this in detail tomorrow. here is the situation. how can we in an increasingly competitive world, how can we not meet the educational standards other countries are working towards? nobody is reducing the number of years they want their children to go to school. you heard me say it before as my wife says.