ICYMI—Hagerty Joins Balance of Power on Bloomberg to Discuss Iran Negotiations, Federal Reserve Leadership, Reconciliation

WASHINGTON-Yesterday, United States Senator Bill Hagerty (R-TN), a member of the Senate Foreign Relations Committee and Senate Banking Committee and former U.S. Ambassador to Japan, joined Balance of Power on Bloomberg to discuss Iran, energy markets, Kevin Warsh's nomination to lead the Federal Reserve, and reconciliation.

Partial Transcript

Hagerty on President Trump's negotiating position with Iran: "He's got all the cards, and what he is doing is negotiating. I think that's what seems to shock people here in Washington sometimes, the fact that President Trump isn't telegraphing every move. I know that frustrates many, but at the same time, I think it puts them [the United States] in the best possible negotiating position."

Hagerty on Iran's leadership: "I think the Iranian regime needs to figure this out. It reminds me of the old Thelma and Louise scene where they're heading off the cliff. That's the Iranian leadership, and you've got the moderate terrorist arguing with the super-aggressive terrorist over control of the wheel. Meanwhile, they're about to drive the thing over the cliff. They should take the off-ramp."

Hagerty on dealing with the Iranian regime: "I think anybody who shouts 'Death to America', 'Death to Israel' should be considered [a terrorist]. And as we know, Iran's been the largest state sponsor of terror in the world. Not the 90 million Iranians that we're talking about, I think they've been subject to this sort of leadership."

Hagerty on military options and the Strait of Hormuz: "I think that's going to be up to the president and to the generals on the ground, but no options are off the table. And as we see what's happening, and we've heard reports that they're putting mines back in the Strait of Hormuz, the president's not going to tolerate that. And I think that that message needs to be made loud and clear."

Hagerty on oil markets and pressure on Iran: "Oil still hasn't gotten where it was after the Russian invasion of Ukraine. Not that I'm hoping that it'll go higher, certainly not. But I think the markets are looking at this. There are a number of mitigating factors that are taking place. We're moving more [oil] certainly out of the United States of America right now. Pipelines are being opened. I think that it's a different story today than it might've been even four years ago. The real key, though, is long-term, medium to long-term. We need to solve this problem. The Strait of Hormuz has been a sword over the entire world economy that the Iranians have held for years and years. I'm talking decades. This has always been a concern. This has always been the threat that they've had, and they're making every attempt they can to exercise it. But I'll make this point very clearly, their options there-meaning the Iranian regime's options-are becoming more limited every day."

Hagerty on Iran's weakening position: "Their munitions have been largely destroyed. Their [naval] capabilities are basically at the bottom of the sea. And if you talk about timing, their capacity to store oil is being consumed right now. Once that capacity is full, because they can't sell this oil, they can't move it out because of the blockade. Once that is full, and we're talking a matter of days, that's going to be a huge problem on the Iranian economy because they're going to have to start shutting down the production facilities then. That's, I think, the breaking point. And the cards are much more on President Trump's side of the table right now than they're on the Iranian regime."

Hagerty on Iran's past attacks and Prime Minister Abe: "They do have the capacity to [terrorize]. That's what they've been in business doing. When I was U.S. Ambassador to Japan, one of my jobs was to ask the Japanese to stop buying Iranian crude oil. That was part of the maximum pressure campaign. It was not an easy set of conversations, but Prime Minister Abe ultimately agreed to do that. He went to Iran to deliver that message and tell Iran personally. The disrespect shown to the Japanese by the Iranian regime was unbelievable. They sent two of these speedboats that we're talking about to go out and attach limpet mines-they're magnetic mines-on the sides of the cargo ships, and they blew them up. That's who we're dealing with. So, very difficult to deal with these people."

Hagerty on why action was needed now: "President Trump has stepped up, and he said he's going to deal with it. I think most everybody knows this, but there is a math problem here that we're trying to solve. And that math problem is quite simple. The pace at which the Iranian regime was building ballistic missiles was ramping up dramatically. And we have an exquisite set of capabilities to take those out. You've seen Patriot missiles go and take them out. But they can make ballistic missiles more rapidly than we can make Patriot missiles. And at some point, they might have overwhelmed our capacity to take them out. They were at 2,500 ballistic missiles. You start working that math, you can see why President Trump moved our military capabilities into the region while he tried diplomatic efforts. I think Steve Witkoff and Jared Kushner did an amazing job, but they also read the room. The Iranians weren't serious about a diplomatic solution at that point in time. But the timing is relevant to the capacity of our military to be able to address Iran. And we were reaching that capacity now. The 2,500 [missiles in Iran's arsenal are] down to a fraction of what it was. And we're in a much better position to deal with the threat. And, I think the world has seen what the Iranians would do if they were able to obtain nuclear capabilities, if they could have gotten a ballistic missile set beyond our ability to deal with it. They'd have had all the time they wanted to develop their nuclear capabilities. President Trump clearly understood that. Our military understands that. That's why it had to be dealt with. Now."

Hagerty on Kevin Warsh and the Federal Reserve: "There are a number of discussions going on right now, and I'm not going to get ahead of those discussions, but I spoke with both Senator Tillis and Senator Scott last night. Senator Scott is the chair of the [Banking] Committee. And I've certainly had a number of conversations with Kevin Warsh. I think he's absolutely the right person for the job to lead the Fed, and he should be ready to go. I think he is ready to go. We've had the hearing. Everybody's heard the statements that Senator Tillis has made, but we've got a lot of Democrats on the Banking Committee as well. They could move to get him out of committee just as easily. And most of these Democrats have already supported Kevin when he was up for Fed Governor before. I don't think it's just Thom Tillis and his issue, but we've got all of the Democrats in the Senate Banking Committee that have the opportunity to step up and help us move a Fed chair into place. If they're not going to do that, then we're back to the same place we are with the shutdown of the government back last fall. What we're having to deal with right now is Homeland Security. I hate to think that they're going to shut down or block the next Fed Chairman, who is as eminently qualified as Kevin."

Hagerty on reconciliation and Homeland Security: "Senator Thune is a straight shooter. I think that he's certainly going to tell you the way it is, but there's going to be a lot of momentum here. There's a great desire by the White House, certainly on the Senate side, and I think our friends in the House realize that sometimes the Senate has a different set of rules. It's not as easy for us to pass [legislation] as it may be in the House. So there'll be continued negotiations going on, but I'm optimistic we'll get the right answer here. We need the Department of Homeland Security open."

Hagerty on security risks and the border: "We were just talking about the situation in Iran. The notion that there could be sleeper cells here is very real. If you think about it, in the last administration between 2021 and 2024, there were 1500 Iranians who were encountered at our southern border. Half of those were released into the United States. So, the odds of there being some type of sleeper mechanism here is greater than zero. We need Homeland Security back open to deal with this. This is the worst possible time to be shutting down the Department of Homeland Security. And I think our colleagues in the House recognize that too."

Hagerty on FISA: "There are going to be more discussions next week. Again, I don't want to get ahead of those discussions because they're delicate. It's important that we get it right, but I'm optimistic that we get to a resolution here soon."

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