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Key GOP Lawmakers Blame "Woke" Policies For SVB Collapse; Biden To Congress: Bring Back Banking Regulations; Biden Bans New Oil & Gas Leasing In Arctic As Admin Green-Lights Massive Alaskan Oil Drilling Project; Today: Biden To Announce Submarine Deal With Australia, U.K.; Michael Cohen Testifies In Trump Hugh Money Case. Aired 12:30-1p ET
Aired March 13, 2023 - 12:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN KING, CNN HOST: Now, the CEO of Silicon Valley Bank specifically lobbied for these reforms. This is Greg Becker. He says that bank, the one that just collapsed, didn't pose a systemic risk. And that imposing the requirements, the Dodd-Frank requirements, it put an outsized burden on us. That was his argument.
Now, Barney Frank, remember, liberal congressman from Massachusetts. He was the House sponsor, lead House sponsor of Dodd-Frank. He introduced it with Senator Chris Dodd of Connecticut. He joined the board of Signature Bank, that's the New York bank that New York had to take over over the weekend in '28 -- in 2015.
In 2018, he said Barney Frank, who pushed the big Dodd-Frank said the rollback does not in any way weaken the regulations. When he said that, he was on the board of Signature Bank. Now, there is no doubt that Donald Trump and his administration wanted the rollback.
(BEGIN VIDEO CLIP)
DONALD TRUMP, FORMER PRESIDENT OF THE UNITED STATES: Dodd-Frank is a disaster, wouldn't be doing a big number of Dodd-Frank. We expect to be cutting a lot out of Dodd-Frank, because frankly, I have so many people, friends of mine that have nice businesses that can't borrow money.
The regulators are running the banks. So we're going to do a very major haircut on Dodd-Frank.
If you take a look at Dodd-Frank, for the bankers in the room, they'll be very happy because we're really doing a major streamlining and perhaps elimination.
This is all about the Dodd-Frank disaster, and they fixed it.
(END VIDEO CLIP)
KING: So let's try to sort the facts from the political rhetoric. With me to share the reporting and their insights, our Chief Congressional Correspondent Manu Raju, and our Business Correspondent Matt Egan. Manu, let me begin with you. You just heard their Donald Trump repeatedly saying let's repeal or at least revise Dodd-Frank.
His top economic adviser at the beginning of administration, Gary Cohn, a quarter of the weekend, saying he's looked at what they did in 2018 when they revised Dodd-Frank. And he doesn't see anything in the changes that would have stopped. If he had left it in place that would have stopped what happened at Silicon Valley Bank, but progressives disagree.
MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Yes, the blame game is in full effect, even as members of Congress in particular don't have all the information about everything that happened here. Over the weekend, members, were briefed by the Treasury Department. But it was not until last night around 7:00 p.m., where the Treasury Department actually briefed a bicameral bipartisan group of members.
But they got very little notice before that briefing, and very few members actually joined that, I'm told. But nevertheless, it has not stopped the finger pointing. Republicans contend it has liberal policies, woke policies, as they say, of those two banks that led to the collapse. And the Democrats pointing to those changes that were made in the Trump administration, that 2018 vote to weaken Dodd-Frank saying that is a key part of what is actually happening in their view.
That is what Elizabeth Warren argued this morning. She, of course, was central and championing the Dodd-Frank law, she pushed back against those efforts to weaken it back in 2018. She wrote an op ed this morning, "Had Congress and the Federal Reserve not rolled back the stricter oversight, SVB and Signature would have been subject to stronger liquidity and capital requirements withstand financial shocks.
They would have been required to conduct regular stress tests to expose their vulnerabilities and shore up their businesses. These bank failures were entirely avoidable."
And you mentioned that it was a bipartisan majority, John, that did vote to do that in 2018. That included some members of the Senate who are up for re-election in this cycle. Joe Manchin, for one was one of -- ones that voted with Donald Trump, same with Jon Tester of Montana, other Democrats joining us as well.
So John, if Washington and Congress has to intervene here in a more aggressive way, it'll be incredibly difficult to get a coalition to try to stabilize the system here was what the administration hopes. They can do this administratively and not have to have Congress intervene.
KING: And Matt, as we watch all that play out, the politics or whether the administration takes executive steps it can do it again. The President himself mentioned these changes pass in 2018, Elizabeth Warren believes even more strongly these changes pass in 2018 are why we're in the mess we're in today.
But as Manu noted, listen to this, as a key leading candidate for the Republican presidential nomination and a key chairman on the House side up on Capitol Hill says no, no, no, no, no. What happened over the weekend happened because of woke policies.
(BEGIN VIDEO CLIP)
GOV. RON DESANTIS (R), FLORIDA: This bank, they're so concerned with DEI and politics and all kinds of stuff. I think that really diverted from them focusing on their core mission.
REP. JAMES COMER (R), CHAIRMAN, OVERSIGHT AND ACCOUNTABILITY COMMITTEE: They were one of the most woke banks in their quest for the ESG top policy and investing. You know, this could be a trend and there are consequences for bad Democrat policy.
(END VIDEO CLIP)
KING: Matt, based on what we know today, and there's a lot we don't know, do we know who's right?
MATT EGAN, CNN BUSINESS REPORTER: Well, John, the politicians are going to do what politicians do, right? They're going to blame each other when something goes wrong, whether it's Republicans blaming wokeness, which feels like a pretty big distraction or Democrats pointing to deregulation.
You know, on that latter point, we should remember that former President Donald Trump, he talked a big game when it came to Dodd- Frank deregulation. You showed clips of that big game.
But the reality is that the vast majority of Dodd-Frank actually survived the Trump era. Still, we do need to learn more about exactly what went wrong here and what role if any deregulation played. Because the last 72 hours really does show how, you know, we're playing with real money here. I mean, these are people's lives, their paychecks, you know, their nest eggs that are at stake.
So oversight is absolutely critical. But, you know, here's what we do know, we do know that the Federal Reserve's interest rate hikes that were carried out by the President's handpicked Chairman Jerome Powell, at the behest of, you know, Republicans who were pushing for more rate hikes, that did play a role in these bank failures because it hurt the value of tech companies. It also hurt the underlying value of the bonds that the banks were sitting on.
Also, there are a lot of questions about how the management at Silicon Valley Bank handled this. I talked to one current employee who said that employees are really angry about how the CEO announced a major need to raise cash without actually lining up the financial support to get through the storm questioning whether or not that actually set the stage for the bank run that we've seen. So that's another thing we need to keep an eye on.
At the same time, I think the big question is kind of what happens next whether or not Washington's shock and all response is enough. The stock market, as you can see on your screen, the Dow is up a little bit so markets are not panicking. But regional banks, John, are down sharply and we do need to keep an eye on that.
KING: So well, it's a good way to end it. Let's follow the facts over the next several days and weeks and then we'll see if we can sort the political rhetoric of who's got a stronger standing, I guess the best way to put it.
Matt Egan, Manu Raju, appreciate the important insights.
Up next for us, the Biden White House yes for a big drilling projects over the objection of climate activist. Liberal see it as another Biden move to the middle and as another affront to his party's liberal base.
KING: President Biden today gave the green light for a massive new oil drilling project on Alaska's North Slope. At the same time, the administration says it will designate the entire U.S. Arctic Ocean off limits for future oil and gas leasing. Now the second announcement is aimed at limiting outrage at first, but climate activist fought that so called Willow project for years, and they see its approval as a betrayal.
Progressives also see it as part of a pattern. President Biden recently taken the side of Republicans, for example, on that controversial D.C. crime bill and he's proposing more restrictive policies to reduce the influx of migrants at the southern border.
Our great reporters back at the table with us. So progressive see this as, you don't have a primary challenge, race to the middle, you know, get to the middle early before 2024. Let's start on the Willow project because Senator Ed Markey of Massachusetts, a friend of the President's from the Senate, calls this an environmental injustice and oil stain on the administration's climate accomplishments.
There's a -- you have to make a choice when something like this happens. Do you just swallow your pride and say nothing and protect your president or do you whack him?
MICHAEL SCHERER, NATIONAL POLITICAL REPORTER, THE WASHINGTON POST: Yes, he's going to get whacked from the left. But honestly, at this point, you know, this election -- is election year moves. So we're getting whacked from the left is not the worst thing that can happen to Biden at this moment. I mean, I think they, in some ways, welcome it.
You have to understand that when Biden came in, I looked up some Gallup polling, in 2021, 24 percent of independents said they were very concerned about energy affordability, that number doubled last year. It's now 48 percent among independents. There's just a dramatic shift that's happened since the war in Ukraine.
I think the immigration problem has gotten worse, not better. The President has to find a way to respond. And this is what the Biden people see is one of the big advantages right now. They don't have a primary. The Republicans is going to be running to the right for the next, you know, 10 months here, and he can now run to the center and get re-elected.
KING: And so, that's the debate in the party, right? We talk a lot about the Republicans speaking McCarthy just barely got elected, a lot of dysfunction. Democrats have their continued fights too. Somewhat masked when you have a Democrat in the White House.
But Josh Gottheimer, one of the centrist Democrats says this in The New York Times. "The country wants common sense. They don't want extremism. And the country wants fiscal responsibility. The President taking on the deficit understands that."
So there's someone who says, yay, yay, move to the middle. On the other side, Congresswoman Pramila Jayapal, the head of the progressives in the House says, "Nobody on the Republican side is ever going to say, 'Thank you, Joe Biden for being so tough on immigration or crime.' So that is not the right approach. It also is not the values-based approach that we need to have as the Democratic Party."
The President's making these decisions, his team is behind these decisions. They clearly think progressives are going to turn out anyway in 2024, that they're not suppressing turnout by moving away from the left.
MJ LEE, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yes, and this isn't, you know, President Biden making some special political move. You know, this is exactly what you expect from a sitting president. You know, when sitting president loses power on Capitol Hill during their first term, you then see them move to the center as they prepare for their own re-election bid.
You know, President Biden made a ton of promises to a lot of people heading into 2020. And we saw over the last two years, those promises meeting reality. And when Democrats had both chambers on Capitol Hill, what the President would often say is, look, I'm having to scale back on X, Y, and Z, because of the Joe Manchins and Kyrsten Sinemas of the world.
And now that Democrats no longer have the House, we very much had the expectation that the power center was going to move from Capitol Hill to the executive branch and that is exactly what we're seeing him do now, right, take some executive actions, some symbolic actions that very much skew more to the center.
KING: And so you mentioned the complicated politics within the party. You could also posit the question is Joe Biden going back to being Joe Biden? Is Joe Biden going back? In that context, listen to this. This is last week, a crime speech in Philadelphia, where President Biden mentioned something Senator Biden did back in the 90s, that has become anathema to the base.
(BEGIN VIDEO CLIP) JOE BIDEN, PRESIDENT OF THE UNITED STATES: Neither Republicans are calling for defunding police departments and defunding the FBI. Now, that's a good one. We're going to find proven strategies for accountable, effective community policing, some cops know the communities they serve. When we did that, in the Biden crime, no crime just plummeted.
(END VIDEO CLIP)
KING: The Biden crime bill is not popular, not so much for -- the community policing provision, some of the mandatory minimums in there, not popular with the base of the party. But there he is.
AYESHA RASCOE, NPR HOST, "WEEKEND EDITION SUNDAY" AND "UP FIRST": There he is. I mean, and that's who Biden is. And that's why a lot of the left has not trusted Biden, but the fact is, they voted for him because he was -- what was on the plate. I mean, I think he does have to walk this line and try to figure out how not to alienate the left, but be able to, you know, tack to the middle.
Because when it comes to issues like crime, people do want something to be done. When it comes to issues like gas prices, people don't want to pay a lot at the pump. And so he has to be keeping that in mind. And that's what you see him doing right now. I do think that it is a difficult position for him to be in, but he's going to be himself, you know?
KING: He's going to have to manage it. That's the challenge. The challenge is to manage it going forward.
Up next for us, the President off to California today. He'll announce a landmark submarine deal with the U.K. and with Australia. It's the latest move to deal with the China challenge.
KING: A big meeting of friends today designed to send a clear message to a strategic foe. President Biden heading to San Diego today for a key meeting with the leaders of Australia and the U.K. On the table? The next steps in a big new partnership meant to provide Australia with nuclear powered submarines. And that move designed to send a very clear message to China.
Our reporters back to the table with us. This is the latest step in several recent steps where the President essentially has tried to put China on notice.
LEE: Yes, only the latest step. You know, we've seen a series of actions taken by the Biden administration recently, to signal that they would like to try to counter China's military might in the Pacific. We saw the U.S. be very supportive of Japan's recent announcement to build up its own military or more U.S. troops in the Philippines, obviously, a whole lot of emphasis on the so-called our Quad Alliance. You know, the President when he talks about China, he often uses the term competition, not conflict. But that almost sort of doesn't capture exactly what's going on. We're really talking about trying to be more competitive with China in case of conflict, especially when it comes to the Taiwan issue.
KING: And you look at the three leaders on the screen right there. Nuclear Submarines for Australia. It speaks for itself.
RASCOE: Yes, yes.
KING: It speaks for itself, Australia being the closest -- the closer ally in the Pacific. You have Japan, obviously, and South Korea. Another big ally now with nuclear submarines and the U.K. Prime Minister, Prime Minister Sunak saying, say, this is the challenge of the EPOC (ph). I mean, laying this out as a giant challenge.
RASCOE: I mean, it really has some feelings of another Cold War, because when you see it's not just a fight over the military, it's a fight over ideology. Who's going to be the real world power? So while, yes, you have the U.S. making moves, you also have China brokering a deal between Iran and Saudi Arabia. That's a move that the U.S. would normally be doing.
So now China is showing its diplomatic power. It's saying we can make moves too. So the U.S. has to be on guard.
KING: Right. And you see, Michael, that headline, that's the Wall Street Journal, China plans new Middle East Summit, diplomatic roll takes shape. It's also been very aggressive in building relationships, both security and economic relationships in Africa, for example. And the President would say, if you were here at this table, you know, we've been late, been late to respond to this.
SCHERER: Yes. And I mean, we've moved from competition to containment. I think this was what you're seeing here. And it is the echoes of the Cold War. And as a political matter, there is no one on Democratic or Republican side, stomping the brakes. Everyone's trying to outdo themselves. And we're heading into an election year.
And so I think both sides of the language of it, we're going to have debate over TikTok bans, we're going to have debate over continued production of American products overseas with us countries who bring those products back. We're moving into an entirely new era. I think people haven't fully internalized how much COVID-19 in those years, really shifted our whole approach to China.
KING: Right. And you make a key point. Republicans saying Biden's not tough enough on China. Democrats saying keep going, there is a bipartisan push --
SCHERER: That's right.
KING: -- to do more. That is the big fight.
Up next for us, Michael Cohen just moments ago speaking ahead of his testimony before a Manhattan Grand Jury. His stark message for Donald Trump, that's next.
KING: Topping our political radar today, right now, Donald Trump's ex lawyer and fixer is testifying in front of the Manhattan Grand Jury. It is investigating hush money paid to the adult film star Stormy Daniels and it is another sign New York prosecutors are nearing a decision on whether to indict Trump.
(BEGIN VIDEO CLIP)
MICHAEL COHEN, FORMER LAWYER TO DONALD TRUMP: This is not revenge, right? What this is is about accountability. I don't want to see anyone including Donald Trump indicted, prosecuted, convicted, incarcerated simply because I fundamentally disagree with them. This is all about accountability. He needs to be held accountable for his dirty deeds.
(END VIDEO CLIP)
KING: A new letter tells us the House Oversight Committee Chairman James Comer now escalating his probe focused on the president's family. The committee has now subpoenaed bank records dating back to 2009 relating to three of Hunter Biden's business associates.
And, quote, just terrible, cruel. President Biden using very harsh terms in a new interview to describe Florida lawmakers who want to cut back on gender affirming care for you.
(BEGIN VIDEO CLIP)
BIDEN: What's going on in Florida is, as my mother would say, close to sinful. It's not like, you know, a kid wakes up one morning and says, you know, I decided I want to become a man or I want to become a woman, or I want to change. I mean, what are they thinking about here? We're human beings.
(END VIDEO CLIP)
KING: We'll see you tomorrow. Brianna Keilar picks up our coverage right now.