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Biden Says, the American Banking System is Safe; Storm-Battered California Braces for More Rain, Flooding Today; Pence Says, History Will Hold Trump Accountable for January 6. Aired 10-10:30a ET

Aired March 13, 2023 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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[10:00:00]

JIM SCIUTTO, CNN ANCHOR: Top of the hour this Monday, big day for banks. I'm Jim Sciutto.

ERICA HILL, CNN ANCHOR: It certainly is. I'm Erica Hill.

This morning, President Biden speaking directly to concerned Americans, trying to strike a calm, reassuring tone, this on the heels of the stunning failure of two U.S. banks over the weekend. Those failures sparking concerns about whether it could lead to more, his message, American banking system is safe.

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JOE BIDEN, U.S. PRESIDENT: All customers who had -- these bans can rest assured they will be protected and they'll have access to their money as of today. That includes small businesses across the country that bank there and need to make payroll, pay their bills and stay open for business. No losses -- and this is an important point, no losses will be borne by the taxpayers.

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SCIUTTO: The president is also vowing some major changes, including legislation, this after the White House it was forced to take emergency action with more than $200 billion in deposits potentially on the line. A critical question now, is this enough to keep other banks from failing?

CNN's Matt Egan and M.J. Lee lead us off this hour. M.J., first to you. I mean, clearly, the president here -- you had the action yesterday from the treasury, the FDIC, to ensure other deposits beyond $250,000 threshold, but also the present one to get out there and say, hey, we're going to do whatever else is necessary. What is the intention here?

M.J. LEE, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yes, that's right, Jim. Clearly, the White House felt that it was important for President Biden to directly address the nation, to try to contain the panic and to really reassure the American people. We heard him saying there the banking system is safe, your deposits will be there when you need them.

This was also a speech where the president took the opportunity to sort of take credit for what he said were quick and immediate actions taken by his administration, and to really explain in plain language what those actions were. Those actions, of course, included the federal government backstopping the depositor's funds starting today. Also the Federal Reserve has created an emergency lending program for banks that might on a liquidity squeeze. None of the costs, the president made clear, would be footed by taxpayers and also said that investors at Silicon Valley Bank that they would not be protected, so drawing that distinction between investors versus depositors.

And he also had this to say about to hold those accountable the people who were responsible for what happened. Take a listen.

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BIDEN: Second, the management of these banks will be fired. If the bank is taken over by FDIC, the people running the bank should not be working there anymore. Third, investors in the banks will not be protected. They knowingly took a risk, and when the risk didn't pay off, investors lose their money. That's how capitalism works. And fourth, there are important questions of how these banks got into the circumstance in the first place. We must get the full accounting of what happened and why those responsible can be held accountable.

(END VIDEO CLIP)

LEE: We also heard President Biden calling on regulators and members of Congress to strengthen and bring back some of the regulations, financial regulations that have been loosened and relaxed over the last few years. That is clearly going to be a huge conversation in the coming weeks here in Washington. But I think we are about to learn in the coming days and weeks whether those actions that the president touted, whether they're going to be enough to contain the fallout these three banks that failed in the course of the week. Is that it or is there fallout to come?

HILL: Yes, certainly. And, Matt, there are a lot of questions, I think, for a number of people, myself included, frankly, who have not really heard about Silicon Valley Bank before. It's important to remember this bank has been around for four decades, so a really long history here. The president said we need a full accounting of what happened here. Do we understand this morning how this seemed to go south so quickly?

MATT EGAN, CNN REPORTER: Yes. There is a lot of moving pieces here. I think you have to remember that a big factor here is the fact that the Federal Reserve has this war on inflation. And when the Fed raises interest rates this dramatically, history shows something tends to break. And in this case, we know that the tech companies that Silicon Valley Bank caters to, their valuations plunged. And so that was a major problem here, also the value of the bonds that banks like this one and others sit on, that collapsed.

[10:05:08] And so that created this mismatch between money that they needed and the money that they actually had.

Now, this is a shock and awe response from Washington. They're trying to put out the fire. They're trying to reassure the public that the money is safe. We need to see how some of the other banks respond and what the markets are saying about those banks is particularly regional banks. Because we know that some of the shares of regional banks, including First Republic, Pac West, Comerica, they're all down significantly this morning. I think that is a sign that there is continued nervousness here. First Republic is down really dramatically despite the fact that they announced that they wind up some new funding from JPMorgan and the Federal Reserve.

The broader stock market has been all over the place, moving higher in the last few minutes, so that is a good sign. But I don't know that we can say that this immediate crisis is over just yet.

SCIUTTO: Yes, notable, it was down a couple hundred points now, up a hundred. We will watch it closely.

M.J., the Biden administration clearly wanted to have something before those markets opened Monday morning, but also crucially before depositors went to the bank Monday morning and not just to individual depositors but also you have a lot of small business and larger businesses that do their payroll through these banks. Can you walk us through some of the steps that the Biden administration took to prevent a worse Monday morning?

LEE: Yes. It's very clear and we saw over the weekend just how furiously administration officials were working to try to contain the fallout. And you're absolutely right, that it was not a mistake, not a coincidence, that the emergency actions that were announced were announced last night. They very much anticipated and wanted to prevent a situation where markets would open in a total state of panic.

It was also not a mistake that it was announced late last night that the president himself would be addressing the situation this morning before he actually left for a three-day West Coast swing. All of this has been really a coordinated effort to try to make sure and to try to take actions as quickly as possible. Obviously not an easy thing to do when you think about the various agencies that are involved and how complicated the situation is, but, again, at least in the short term, the immediate sort of task at hand for this administration was really try to contain the panic from spreading to the broader U.S. economy and the banking sector.

SCIUTTO: M.J. Lee, Matt Egan, thanks so much.

Joining us now to dig a little deeper, Ben Bergman, he's a senior correspondent for Business Insider covering Venture Capital and startups. Good to have you on. I mean, this is your area here, because Silicon Valley Bank, I mean, really a bank for many of these startups for many V.C. firms here.

First, based on what you are seeing here right now, watching the markets closely, as I know you do, but also speaking to folks in the sector here, does it look like the steps taken so far by the administration, the fed, the Treasury Department have been sufficient to keep this from going more broadly?

BEN BERGMAN, SENIOR CORRESPONDENT, BUSINESS INSIDER: Yes. There was a collective sigh of relief in Silicon Valley among investors and startup founders who were literally concerned whether they'd be able to make a payroll, whether they would be able to -- and at least that they'll be able to do that.

HILL: Ben, you have this really interesting piece about not only how important this bank is and has been over the last 40 years but also about concerns that were bubbling toward the end of last year, which raises the question of if some of the signs where there, could this have been avoided?

BERGMAN: It sure seems like it. It seems very easy to say now in retrospect that it would be a bad idea for a bank to put tens of billions of dollars in ten-year treasuries that they would not be able to access for ten years and to see that is a bad idea if interest rates rose. No one expected interest rates to rise this quickly, but still in retrospect, this seems ill-advised.

And it's interesting that the CEO in Silicon Valley Bank testified in 2015 and said we are not a risk to systematic failure, we need less regulation. And now, the Fed yesterday this does pose a systematic risk, and, therefore, we need to essentially bail you out.

SCIUTTO: And you also have to remember the bottom, interest rates go up, bottom price goes down, so all of those assets that Silicon Valley Bank and others were relying, they're less valuable than they used to be.

I do want to talk about regulation, because we had 2008, big financial crisis, Dodd-Frank passed largely to increase the reserves that banks had to hold so that they wouldn't need to be bailed out. In 2018, Trump administration rolled back some of those regulations, specifically for regional banks. Did that have an effect here? Did that help lay the ground work for this?

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BERGMAN: Well, I think it did, because this was not supposed to happen after the financial crisis. And this is an issue now of regional banks, and you see other regional banks threatened now of this very issue. And it seems also a bad idea that these ten-year treasuries were not market-to-market, that this wasn't on their books. And this was all spurned by a lot of venture capitalism investors on Thursday saying they did not want to have their money anymore in the bank, it caused a modern-day bank run, the first Twitter bank run, that Twitter should not be allowed to bring down a bank in less than 24 hours.

HILL: And yet, here we are. Ben Bergman, I appreciate you being with us this morning. Thank you.

BERGMAN: Happy to do it.

HILL: Well, right now, people in California bracing for another round of severe weather, more than 18 million people currently under flood alerts. Excessive rainfall expected to come through again battering the already rain-soaked state.

SCIUTTO: CNN Meteorologist Chad Myers tracking the storm, as he always does. Man, if it is not raining out there, it is snowing, or it's raining and it's snowing. I mean, tell us what it's like on the West Coast right now.

CHAD MYERS, CNN METEOROLOGIST: And rain on snow, which means the rain is melting the snow causing more runoff and here we go again, another big sigh. Look at this mass cover that is about to come on shore to California tomorrow morning. Yes, there are some showers right now, but this is not what we are talking about. We are talking about the rain that came in over the weekend over a foot.

These are not snow numbers. This is liquid, rain that came down, and now more rain will come down. Reservoirs are filling up. That's the good news. Groundwater will take a long time. We have been seeing that. We'll picture that one very, very quickly. That was Lake Oroville. They're even letting water out of Oroville. We have not done that for many, many years.

Here comes the atmospheric river, the pineapple express that comes through tonight. It comes through tomorrow morning and in just tomorrow afternoon, significant rain. There will be rain in Northern California today but it's the central and southern coast that we are really worried about and even all the way down to L.A. There could be with this now that the ground and the mountains, the hills are saturated, there could be many more mudslides with this.

Here is 8:00 tomorrow morning Eastern Time. All of a sudden, that rain is heavy, heavy all the way down to Southern California, more hours and hours, one to two inches of rain per hour in spots. Nowhere can handle that now, there has just been too much rainfall for too long.

It just -- I know that we have not said it that for four year, but all of a sudden, we are in a position where the ground just can't handle anymore without more flooding.

HILL: I mean, California really cannot catch a break. It is feast or famine and what a mess. It's so tough for folks there. Thank you, Chad.

MYERS: You're welcome.

SCIUTTO: Well, still to come, former Vice President Mike Pence offered his strongest rebuke yet of his former boss' role in January 6th, quite remarkable comments.

HILL: Plus, as the decision on possible criminal charges looms, Trump will campaign in Iowa tonight for the first time since announcing his third White House bid. We're going to speak with a reporter on the ground there in Des Moines. And a Texas man is suing three of his ex-wife's friends claiming they illegally helped her get an abortion. Those details, ahead.

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SCIUTTO: Former Vice President Mike Pence delivered harsh words about former President Donald Trump, saying that history will hold him accountable for the attack on Capitol Hill.

HILL: Those comments come as Pence is weighing whether to throw his hat in the ring for the 2024 president race.

CNN Chief National Affairs Correspondent Jeff Zeleny is with us now. So, Mike Pence has sort of talked about Trump and the insurrection before, talked around it certainly a number of times. Why are these comments different? Why are they getting different attention this morning, Jeff?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Well, good morning, Erica and Jim. The former vice president has talked about this and, in fact, he has written about it in his book as well, but it is different now just given the timing and the context, particularly in the wake of the whitewashing that we have seen about the January 6th attack on Fox News and on Tucker Carlson's program specifically, when he has tried to show that, really, nothing was going on in the Capitol, which everyone knows, of course, is not true.

But over the weekend at the Grid Iron Dinner, it's an dinner of Washington news executives and others, the former vice president was speaking, and his speech was riddled with comedic humor as well, but then very serious words. Let's take a look at some of what he said.

He said, I know that history will hold Donald Trump accountable. Tourists don't injure 140 police officers by sightseeing. Tourists don't break down doors to get to the speaker of the House or voice threats against a public official. He says, make no mistake about it, what happened that day was a disgrace and it mocks decency to portray it in any other way.

So, the former vice president here is speaking also against Fox News and speaking against what really has been an attempt to change the narrative, the facts of what happened that. This, of course, all comes as he is inching closer to exploring and, in fact, likely jumping into the presidential bid of his own. He is going to New Hampshire on Thursday, to Iowa Saturday.

The question is, is there sort of room in the Republican Party for this type of rhetoric. His advisers say that he is going to play the lane or play the candidacy as the adult in the room, speak truth to power and have the freedom to speak against the former president.

[10:20:01]

One thing we should point out, though, he has declined really to testify either on Capitol Hill or before the grand juries on this. So, I am not sure he is trying to have both ways. He is trying, of course, speak in public about this, but certainly is not going to every extent that he can to sort of give the narrative at least in the legal setting, but significant comments nonetheless.

HILL: Significant comments, as you point out, maybe not trying to have it both ways, but certainly trying straddle some sort of line there. Jeff, I really appreciate it. Thank you.

ZELENY: You bet.

HILL: Well, tonight, former President Trump returns to Iowa. This is his first time in the state since launching his third bid for the White House. He, of course, won the state in 2016 and 2020 and it is critical that he get the support in Iowa because a win or loss in the caucuses could, of course, set the tone for the rest of the primary season.

Joining me now, Chief Politics Reporter from the Des Moines Register Brianne Pfannenstiel. Great to have you with us this morning, Brianne.

So, there are some interesting polling. As we look at what's to come from Donald Trump, I do just want to get your take first on Mike Pence, picking up where Jeff left off, because in this latest Des Moines Register poll that you have, mike pence had the highest unfavorable. Is there any sense that he has an opportunity to turn that around in Iowa if he decides to throw his hat in the ring?

BRIANNE PFANNENSTIEL, CHIEF POLITICS REPORTER, THE DES MOINES REGISTER: That's exactly right. His unfavorables have really risen over the past couple of years, as we have seen Donald Trump make attacks against his former vice president.

But the thing about Iowa is the Iowa Republicans are really open to hearing from everyone. This is a long process. We have got about a year to go before the Iowans will gather and caucus and make that first vote. So, I think people are very open to hearing from Pence.

We have seen him arrive in Iowa for several events over the past couple of years, and he received a very warm reception. So, there are people who want to hear from him, want to hear what he has to say and we are certainly seeing an openness from Iowa Republicans to hear from a lot of candidates other than Donald Trump.

HILL: They certainly have a lot of opportunity to do their homework given how many visits they will have, of course, heading into 2024, and they are known, as you point out, for doing their homework.

Donald Trump's base, how solid is that at this moment?

PFANNENSTIEL: Well, we did some polling at The Des Moines Register just this past week that looked at kind of just an early sense of how Iowa Republicans are feeling about the field. And what we saw was a real kind of an erosion of support for Donald Trump right now.

We asked people how likely they would be to vote for him if the general election were today and he were the Republican nominee. And in 2021, we saw that 69 percent of Iowa Republicans said that they would definitely vote for him, and that is down 22 percentage points today, just 47 percent. His favorability numbers have also fallen from about 90 percent to 80 percent today.

So, to be clear, there is still a big chunk of Iowa Republicans who think very highly of the former president who would certainly caucus for him, vote for him, but we are seeing that start to fall away. And so just anecdotally, what I can tell you from being at a lot of these Republican events is that people want to hear from other folks. They want to hear from Mike Pence. They want to hear from Nikki Haley. They want to hear from Tim Scott. And they're very open. Ron DeSantis made his first visit to this state just this past week and he had very large crowds. He had a lot of people saying, I like what he has to say. He's very -- he has a lot of the same policies as Donald Trump but with less baggage.

HILL: Less baggage, we are hearing that a lot.

Look, the reality is, in this country, a lot of politics, and the politicking that happen, and those who move forward, a lot of that can be tied often to money, because they need that donor support. What are you hearing from folks that you are talking to on the ground in terms of how that support is starting to spread out or where it's solidifying, if it is?

PFANNENSTIEL: Well, I think, nationally, we are seeing a lot of the Republican donors start to look about whether they can kind of coalesce their support behind a Donald Trump alternative. And so there will be a lot of pressure, I think, here in Iowa on these candidates to either get it together or move on.

Iowa is the first test. They'll have about a year of campaigning and organizing to try and get that support. And if you are not one of the top one, two, maybe three people out of Iowa, I think we're hearing from folks saying maybe it is time to pack your bags and let those folks who are gaining support kind of get some ground.

So, it will be a real test to see whether these folks can get the donor support, can get the organizational support, that the endorsement really kind of matter on the ground here in Iowa. It's much more of a grassroots ground game than we see nationally.

HILL: Brianne Pfannenstiel, great to have you with us this morning. Thank you.

PFANNENSTIEL: Thank you.

SCIUTTO: Up next, the first lawsuit we have seen in Texas tied to the state's restrictive abortion laws. A man is suing three women he says illegally helped his ex-wife get an abortion.

[10:25:01]

(COMMERCIAL BREAK) SCIUTTO: In a major test of Texas' highly restrictive anti-abortion law, a man is suing three of his ex-wife's friends claiming they broke the law by helping her get an abortion.

HILL: This is the first such case brought under the state's near total ban on abortion.

CNN's Whitney Wild joins us now. So, Whitney, walk us through this lawsuit and what he is alleging.

[10:30:03]