The seeds of success in 2022 began in June 2010, when Democrats last attempted to pass a sweeping climate-change bill. Back then, the party had far greater numbers in the House and Senate, but lacked the courage of their convictions.
The “Waxman-Markey” bill, which would have set an emissions trading plan and capped the amount of greenhouse gasses that could be emitted nationally, squeaked through the House in which the Democrats had a nearly 40-seat majority by seven votes. But the mood on the floor the day of the vote was grim. Democrats were divided. Dozens of them, fearing electoral blowback, were voting against it, while many voting for it expected to pay a price.
“Everyone saw it as a walking the plank vote,” recalled Perriello, one of the few lawmakers in competitive districts, along with Ohio Rep. John Boccieri, who voted yes. “We said, if this costs us our seat to save the planet, we are going to do it anyway.”
The Senate, where Democrats held 60 votes — enough to defeat a filibuster — never brought the legislation to the floor, just as many House holdouts had feared.
After the House voted, Speaker Nancy Pelosi met with Gene Karpinski, the president of the League of Conservation Voters. “We passed what you wanted,” she said. “Now are you going to have our backs?”
Karpinski told the speaker that, of course, his group would do everything in its power to support Democrats like Perriello who’d cast difficult votes. But it became clear soon enough that his organization — and the environmental movement writ large — had little political muscle to flex. That November, Democrats were obliterated in midterm elections driven by voter frustration over the initial rollout of the Affordable Care Act and the country’s slow economic recovery. Among the whopping 63 seats that Republicans took back was Perriello’s.
Last year, Democrats once again controlled Congress. But things were different. They had almost no margin for error in either the House or the 50-50 Senate. It took every last bit of pressure a far stronger, broader and more strategic climate movement could muster to get Sen. Joe Manchin (D-W.Va.) on board. But once he finally signed on, the passage of the Inflation Reduction Act was never in doubt.
This time, there were no defections.
On the morning of the House vote, some of Perriello’s former colleagues invited him to join them on the floor. He joined a flurry of caucus-wide jubilation and, amazingly, optimism about passing the largest climate package ever — and what it meant for the midterms just three months away.
“What was remarkable wasn’t just how excited everyone was to vote for this,” Perriello recalled. “People were talking about how they were going to run on this. It was a complete sea change in the politics.”
Last November, when Democrats defied history and averted the sweeping midterm defeats that the president’s party usually endures, it offered further proof, for many activists and policymakers, that acting on climate was essential not just for the planet’s survival but, politically speaking, their own.
“The politics have changed so dramatically that it is not okay to be against taking action any longer,” said Lori Lodes, the executive director of Climate Power, a paid media operation founded in 2020 to build support for legislative action. “Climate has come a long way over the last 12 years and it’s due to a lot of hard work.”
The IRA’s passage, ultimately, is more than a story of one powerful West Virginia senator reluctantly falling in line with the rest of his party. It’s the story of how the same activists who failed 12 years earlier succeeded in bringing enough pressure to bear that Manchin, who held up climate legislation for nearly a year until finally authoring a compromise, came back to the table — despite facing the prospect of seeking reelection in a state long considered synonymous with the fossil-fuel industry.
“It’s an infinitely more powerful movement than it was,” said Sen. Ed Markey (D-Mass.), the 2010 bill’s co-sponsor. “And it is the movement that created the momentum for the moment when we finally passed the legislation.”
The climate coalition’s hard-won success is even being held up now as a template for other progressive advocacy groups. When Anita Dunn, a senior adviser to the president, has met with care economy activists about their priorities falling out of the final version of the IRA, she’s urged them to study the environmental groups’ political metamorphosis and the kind of long-term commitment that’s often required to win in Washington.
Twelve years after his grim conversation with Pelosi had clarified LCV’s shortcomings, Karpinski and other activists spoke with Dunn on a Zoom shortly after the IRA’s passage. Climate action, she told them, finally got done because of the campaign they ran.
“You guys made it impossible,” Dunn told the group, “for us to leave climate on the cutting room floor.”
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( With inputs from : www.politico.com )
Administration officials have often remarked how foreign trips can provide Harris room to shine that, they feel, the D.C. chattering class misses when talking about and covering her. Harris earned rave reviews for her speech last month at the Munich Security Conference, where she proclaimed Russia had committed crimes against humanity. And her trip to Africa once more demonstrated the general relief she and her staff usually feel the further away they get from the political sniping that trails her at home.
Harris arrived Sunday in Ghana, the first of a three-nation, one-week trip across the continent, to talk about economic security and U.S.-Africa unity. She landed to the sound of drums and dancers wrapped in traditional Kente cloth and headbands.
At subsequent stops, she has been notably less guarded, relaxed and seemingly lighter on her feet. It was noticed by the locals, too.
“I’m so proud and so happy to see her in Africa. It was emotional that she made it here and that Ghana is her first African country. She clearly loves Africa and she loves Ghana,” said a young woman named LaToya, who did not want to give her last name out of fear because of anti-LGBTQ sentiments in the country. She had watched Harris’ speech at Black Star Square, a Ghanaian monument representing the nation’s freedom from colonialism. “Based on her smiles, she clearly enjoyed it here. When you come to a place like this, you can be yourself.”
The official goals of Harris’ trip were to enhance relations on the continent and ensure that China did not get a stronger foothold in the economies there. A senior aide said the vice president, as the first Black woman to occupy that post, was “uniquely positioned to highlight the culture and opportunities, most especially the dynamism of African youth.”
But unlike the diplomatic meetings and security conferences that marked her past travel abroad, the trip to Ghana also featured more direct interactions with the populace. The vice president made several stops during her visit to highlight the nation’s arts, including a woman-owned gallery and a community recording studio.
Ghanaian singer Amaarae met with Harris at Vibrate Space, an artists’ collective. She said the vice president pledged her team would follow up with her and keep using art and culture to demonstrate Ghana as a worthy investment.
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( With inputs from : www.politico.com )
But the new law has also attracted an armada of lobbyists repping a wide range of industries. Some may be making long-shot bids — lobbyists for Snap, for example, plan to ask Washington to subsidize plans to build chips for its augmented reality glasses. And filing a lobbying disclosure doesn’t necessarily mean a company will ask for money.
Still, the flood of filings illustrates the corporate free-for-all that ensues when Washington opens its checkbook — particularly early in the game, when just a few dollars in lobbying fees could reap serious rewards down the line.
“This is a low-risk, high-reward maneuver,” said Scott Lincicome, director of general economics at the libertarian Cato Institute. “It would almost be corporate malpractice to not go after that cash.”
Lincicome pointed to the broad array of organizations that can apply for the money under the CHIPS and Science Act — “literally anyone or anything that touches a semiconductor in some way is eligible,” he said.
Josh Teitelbaum, a lobbyist at Akin Gump Strauss Hauer & Feld, said the lobbying frenzy is only natural: the ecosystem around the U.S. chip industry, he said, “is much broader than just the small handful of companies that do the actual fabrication.”
Teitelbaum is lobbying for CHIPS and Science dollars on behalf of Snap, which develops and manufactures glasses containing AR tech in addition to operating Snapchat, the popular social media app. According to Snap spokesperson Peter Boogard, the company wants to convince the Commerce Department to send subsidies so it can build stateside the “leading-edge semiconductor processing components” used in its AR products.
Teitelbaum suggested Snap isn’t the only unexpected company angling for a piece of CHIPS and Science money. “You could see some companies and industries weighing in that you might not necessarily expect to be there,” Teitelbaum said. “But all that is just an indication of how embedded chips are in our everyday lives.”
On top of the tens of billions in direct subsidies, the CHIPS and Science Act also earmarks roughly $200 billion in eventual funding for federal research agencies like the National Science Foundation. That money is another big draw for lobbyists — the vast majority still needs to be appropriated by Congress, and Lincicome said there is “probably going to be a lot of folks lobbying to ensure that the actual appropriation occurs.”
That’s true for the XR Association, a group representing the augmented and virtual reality industries which mounted a successful campaign to make “immersive technology” eligible for R&D funding under CHIPS and Science. The XR Association continued to lobby on the law in the final months of 2022 — and Miranda Lutz, the group’s director of public policy, said it’s now pressuring Capitol Hill to pour money into those programs.
“We’d obviously like to see full funding for NSF, [the National Institute of Standards and Technology] and some of the other agencies that would have oversight over money that could potentially flow into XR R&D,” Lutz said.
The big players
While Snap and the XR Association are open about their CHIPS and Science plans, that’s not the case for most organizations lobbying on the law.
The split funding opportunities — tens of billions of dollars in microchip subsidies along with hundreds of billions of dollars in science agency authorizations — not only give lobbyists two distinct funding flows to track. They also make it easier for companies lobbying on the law to conceal whether they’re more interested in direct subsidies or the benefits brought by boosted R&D budgets.
Despite their divergent business models, the five top U.S. tech companies — Meta, Microsoft, Google, Amazon and Apple — all lobbied on CHIPS and Science implementation in the last three months of 2022.
Of the five, Meta was the only one that explicitly said it does not “have any plans to” ask Commerce for microchip subsidies. Meta spokesperson Andy Stone said the company paid lobbyists to help it understand “the effect of the legislation on our device manufacturing.”
Kate Frischmann, a spokesperson for Microsoft — which paid two separate lobbying firms to work on CHIPS — said the company is merely “monitoring” its implementation (the law appropriated $1.5 billion for next-gen wireless tech, which is mentioned in one of Microsoft’s filings). Google spokesperson José Castañeda said the company backed CHIPS and Science ahead of its passage last summer, but declined to explain Google’s subsequent interest in the law’s implementation.
Spokespeople for Amazon and Amazon Web Services — both lobbied on CHIPS implementation in the final months of 2022 — declined to comment on the company’s strategy (Amazon’s filing mentions “issues related to STEM education, computer science education, and job training”). Apple spokespeople did not reply to multiple requests for comment on its interest in CHIPS implementation, but the company’s Q4 filing mentions “issues related to the domestic manufacturing of semiconductors” as well as “information related to Apple’s supply chain.”
Other big tech companies, including software firm Salesforce and networking giant Cisco Systems, lobbied Washington on CHIPS and Science at the end of last year. Salesforce spokesperson Allen Tsai said the company is focused on the law’s infrastructure, supply chain and workforce provisions. He also said Salesforce has “no plans to apply for the law’s subsidies.” A spokesperson for Cisco did not respond to multiple requests for comment.
Casting Call
Big tech represents just a small slice of the companies and organizations who lobbied on CHIPS and Science’s implementation. Top defense contractors like Northrop Grumman and General Dynamics paid lobbyists to work on the law. So did HVAC companies like Carrier and Trane (chipmaking requires advanced filtration technology and climate-control systems, which could explain their interest).
The law’s implementation is a potential bonanza for a wide range of materials suppliers, including coal companies like CONSOL Energy and the American Coatings Association, which represents the paint and coatings industry. “When thinking about computer chip manufacturing, one doesn’t naturally think about massive slabs of high-grade aluminum,” reads one document submitted by aluminum supplier TST Inc. to the Commerce Department late last year. “Yet the two are inextricably connected.”
Massive labor unions, including the AFL-CIO and the Communications Workers of America, have lobbied on the law’s implementation. In a comment submitted to the Commerce Department last November, the International Association of Sheet Metal, Air, Rail and Transportation Workers urged the administration to incorporate “strong labor standards” into the financial assistance given to companies.
In an apparent win for the unions, late last month the Commerce Department said it would prioritize construction projects that use project labor agreements.
A bevy of local government agencies and regional development groups, from the Los Angeles County Metropolitan Transportation Authority to the Greater Pittsburgh Chamber of Commerce and the Port of Portland, all lobbied on CHIPS and Science implementation. So did some national governments — the Republic of Korea warned the Commerce Department late last year not to discriminate between U.S. and foreign-owned companies when distributing funds.
Top telecom firms like Dish Network and Lumen Technologies — likely attracted by the law’s support for advanced wireless tech — have weighed in. So have major health care companies like Baxter Healthcare, as well as biotech firms like Illumina and Novozymes.
Car companies were hit hard by the microchip shortage that began in the early months of the pandemic. Last Congress, they successfully lobbied for CHIPS and Science to include $2 billion in subsidies for the production of less-advanced “legacy” chips frequently found in automobiles. And disclosures show they were still at it after the bill’s passage — Ford, General Motors, Toyota, Nissan, Hyundai and Honda all lobbied on the law in the last quarter of 2022.
Then there are the universities. Higher ed has a huge financial stake in the CHIPS and Science Act, particularly when it comes to the hundreds of billions of dollars it authorizes for federal research agencies. From the University of California to MIT, Ohio State University, the University of Central Florida, Harvard, the State University of New York and (many) more, universities from across the country lobbied on the law’s implementation.
Even the crypto industry has gotten in on the action. Coinbase, the company behind one of the largest cryptocurrency exchanges, was among those lobbying on the law’s implementation at the end of last year. A Coinbase spokesperson said the company is most interested in a provision that requires the White House Office of Science and Technology Policy to hire a cryptocurrency specialist, as well as one that directs the NSF to boost research into “distributed ledger technologies.”
There are also groups whose lobbying on CHIPS and Science defies easy explanation. AIPAC is chief among them — although filings show that Washington’s premier pro-Israel group lobbied on CHIPS and Science implementation late last year, the group did not respond to repeated requests for comment. Shipping giant FedEx, which lobbied on CHIPS and Science in the same time frame, also did not respond to multiple questions regarding its interest in the law.
A spokesperson for Audible, an online audiobook and podcast service owned by Amazon, said their Q4 lobbying on CHIPS and Science was done to ensure that the law’s discretionary spending “includes place-based criteria and funding for financing that can be directed to high growth startups interested in joining Newark’s innovation corridor” (Audible is headquartered in Newark, New Jersey).
Some lobbyists may have even been confused about the CHIPS and Science Act’s provisions. The law includes $2.5 billion for research into “advanced packaging,” which investigates how to best combine microchips into one device for maximum processing power.
That’s different from the kind of packaging that interests the Flexible Packaging Association, which represents companies that create actual packages out of materials like paper, plastic or aluminum foil and which paid a lobbyist to advocate on the law’s implementation at the end of 2022. When asked about the apparent discrepancy, FPA president and CEO Alison Keane said that while the group’s lobbyist “[does] track the act, it is not on the CHIPS side of things.”
It remains to be seen whether the flood of lobbying activity on CHIPS and Science ends with payouts for a wider range of companies than the core microchip and R&D firms. In a call with reporters late last month on the law’s implementation, Commerce Secretary Gina Raimondo called national security “the primary lens through which we will evaluate everything.” But Snap and Teitelbaum are so far unfazed.
“Broadly speaking, you don’t necessarily need to have a national security application in order to be eligible for this funding,” Teitelbaum said. And Lincicome highlighted the stipulations the Commerce Department recently attached to the money — including new childcare and labor requirements for firms that take more than $150 million in subsidies — to suggest the administration isn’t as serious about the national security angle as it suggests.
That would be good news for companies like Snap. And as it and a clutch of other firms make their play, Lincicome said it’s “inevitable that you’re going to have a connection between lobbying dollars and final disbursement of subsidy funds.”
“This is not corruption,” Lincicome said. “It’s just simply squeaky wheel.”
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( With inputs from : www.politico.com )
Even more than the humor, this gathering of Washington worthies seemed smitten with the moral seriousness of his Trump criticisms.
“His reckless words endangered my family and everyone at the Capitol that day, and I know that history will hold Donald Trump accountable,” Pence had said, before deploying his own January 6 steadfastness to flatter the Beltway media: “We were able to stay at our post, in part, because you stayed at your post. The American people know what happened that day because you never stopped reporting.”
It brought down the house.
It also demonstrated anew that Washington in 2023 is a cheap date.
How else to explain the rapture about a speech whose key applause line — “The American people have a right to know what took place at the Capitol” — is undercut by Pence’s own ongoing legal efforts to avoid testifying?
This isn’t to take anything away from folks reporting on the speech’s 2024 political implications. It genuinely is news that the man once known for abject loyalty has assumed a new, righteous, fighting posture that has thus far eluded fellow onetime administration loyalists like Nikki Haley and Mike Pompeo.
But at the same time, the glow in the ballroom of the Omni Shoreham Hotel may have said less about Pence than about his audience, a collection of reporters, dignitaries, eminences and also-rans gathered for one of the great rituals of an endangered bipartisan social calendar — part of a broader fading Washington whose gatekeepers can appear grateful when a Republican merely shows up.
That sense of being endangered, I suspect, had a lot to do with the immediate inclination to see the best in Pence’s speech.
The 2023 status quo where ambitious Republicans steer clear of Beltway insiderishness is a real threat to permanent Washington’s bipartisan sense of itself. It almost guarantees that someone like Pence — not a RINO, but a genuine conservative true believer — has to clear an astonishingly low hurdle to win praise.
Sometimes, all you have to do is show that you’re willing to play ball — that is, to do things as normal as show up at capital traditions, deliver self-deprecating remarks and note that an attempt to overturn a democratic election by force actually happened (and was bad). The sugar-rush of seeing someone graciously join the ranks quickly overwhelms any skepticism.
How old-school and friendly is the annual affair graced by the ex-veep? At least one of Pence’s self-deprecating one-liners made a circuitous way to his script via onetime Biden speechwriter Jeff Nussbaum.
Nussbaum declined to comment, and Landon Parvin, a veteran of many Gridirons who has helped Pence’s team, allowed that “most speakers would steal a line off a dead man.” But the sort of cross-aisle riffing among pro wordsmiths that leads to a Democrat’s kernel of a joke winding up in a Republican’s stand-up routine is the sort of thing that seems altogether in-place on an evening when people dress up in white tie to watch comic song-and-dance routines before singing “Auld Lang Syne” and toasting the president — and seems altogether out-of-place anywhere else in 2023.
Even when politics reappeared this week — the White House disparaged the Buttigieg gag as homophobic; Twitter piled on — nothing undercut the idea that Pence had done something brave and honorable in hitting Trump about January 6 before an elite Beltway audience.
I don’t disagree with anything Pence said when it comes to January 6, yet the platitudes seem a little much. Yes, Pence did the right thing, in the face of real danger, when it came to Americans’ right to select their government without insurrectionists’ interference. On the question of our right to know what happened that day, though, his record is a lot less admirable.
Even as he was basking in the approval of the white-tie crowd, Pence’s lawyers were fighting a subpoena for testimony about Trump’s efforts to subvert the 2020 election — something he’s vowed to go all the way to the Supreme Court to prevent. The logic of Pence’s argument is that, in his constitutional role as president of the U.S. Senate, he was protected by the Constitution’s speech-and-debate clause. He said it’s about protecting the legislative branch from the executive. In one press event, he called the effort to secure his testimony a “Biden DOJ subpoena,” the sort of divisive slam at professional prosecutors that official Washington typically hates.
Courts will decide whether this argument passes muster. But you don’t have to be a Constitutional scholar to know that this legalistic stuff is not the posture of a man who is determined to shed sunlight on every detail of that horrific day in order to prevent it from ever happening again. At the very least, it’s incongruous with the striking, almost martial, language of duty that Pence used when talking about the obligation to “stay at our post” in the face of grave danger.
I’ve heard a bunch of theories as to why Pence is fighting the subpoena. The one that’s the most forgiving — and simultaneously the most cynical — is that he expects to lose, and that the public show of not looking like an anti-Trumper champing at the bit to testify will make him more credible once he does, possibly to jurors (that’s the forgiving version) and almost certainly to Republican primary voters (there’s the cynical one).
Even if that works out brilliantly, it also looks like a man wanting to have it both ways.
Which brings us back to the white-tied crowd at the Gridiron, an audience that included senators, governors, generals, cabinet secretaries and heads of international institutions. It’s a slice of Washington that is very keen on feeling bipartisan, with balanced displays of Democratic gags and Republican gags, topped with retro homages to things we have in common (color presentation by a military band; toast to the president).
What it didn’t include, this year, was any sitting GOP member of the House or Senate.
The only sitting GOP elected official was last year’s Republican speaker, New Hampshire Gov. Chris Sununu, whose own star turn at the 2022 dinner involved a much more comic skewering of Trump — and who has also benefited from the establishment’s eagerness to welcome a conservative who will join in the traditional pastimes and occasionally punch right.
We’ve entered a moment in our country where the political logic inside one of our two political parties is to steer well clear of officially non-partisan legacy institutions, from media to culture. Leading GOP politicians like Ron DeSantis limit their media appearances to conservative outlets, nixing even the Sunday shows that used to get derided as milquetoast. The incentive structure in Republican politics encourages candidates to dis shared American institutions from Disney to the NFL for allegedly being captured by the wokes. A night out with Washington elites dressed up like 1920s-era maitre d’s is not exactly a surefire political winner. (Luckily, it takes place off-camera.)
We’ll find out soon enough whether this separation will matter when it comes to a general election where you need to win votes from people outside conservative culture. Once exposed to mainstream platforms, might a GOP candidate come off like a boxer who hasn’t had enough advance sparring practice?
But I think we already see the impact among people who exist in traditional institutions that rely on being seen as bipartisan. We, too, are out of practice, easily wowed by a modicum of bonhomie.
It’s pretty clear, by the way, that Pence’s team knew it, too. Pence advisor Marc Short told my colleague Adam Wren over the weekend that they believed the appearance would improve the disposition of a political elite who had already written off the former vice president. “This was a different audience for him,” Short said.
Of course, there’s still a bar for the humor, says Parvin, a veteran of 40 years of Gridiron routines: “You live or you die by the joke.”
“Pence got a standing ovation, which tells me that people want to feel better about each other and for life to return to normal once again,” he told me this week by email. “Humor can help do that.”
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( With inputs from : www.politico.com )
In an op-ed in The New York Times, Sen. Elizabeth Warren (D-Mass.), a longtime advocate for the forced breakup of the largest tech firms, blamed Washington’s “weakening of financial rules” for SVB’s collapse. Sen. Richard Blumenthal (D-Conn.), a reliable critic of most things the tech industry does, blamed “bank executives” for SVB’s failure and praised the government’s bailout of depositors.
Totally quiet were Sen. Amy Klobuchar (D-Minn.), the key driver behind last cycle’s failed tech antitrust push, as well as Reps. David Cicilline (D-R.I.) or Ken Buck (R-Colo.), who were responsible for identical antitrust legislation in the House.
This is not the reception a lot of Valley insiders were expecting. In fact, a big theme on tech-investor Twitter over the weekend was that Washington would use — or perhaps was already using — their industry as a political football.
“I believe that if Silicon Valley Bank were instead called Farmers Bank Of Santa Clara (they bank a lot of winegrowers!) we would have had this easily resolved,” OpenAI CEO Sam Altman tweeted on Sunday. “Unfortunately it became somewhat political.”
The tech investors’ fears proved unfounded: Two days after the bank’s failure, the Federal Reserve, the Treasury Department and the Federal Deposit Insurance Corporation announced a bailout for SVB’s depositors.
How’d they get it so wrong?
Margaret O’Mara, chair of American history at the University of Washington and an expert on the interplay of politics and tech, said the VCs misread the room — and not for the first time.
“This kind of adversarial, David and Goliath relationship that I think some of these tech moguls would like to set up [with Washington] — that’s not how it works,” O’Mara said. “It’s not how it’s worked in practice, and it’s not what’s going on today.”
There was at least one exception to the general trend of politicians giving the tech industry a pass — Vivek Ramaswamy, a longshot candidate in the GOP presidential primary, accused Silicon Valley of “pushing the idea that SVB depositors need to be rescued to prevent a run on other banks” and called for an “‘Occupy Silicon Valley’ movement” if a bailout materialized.
But neither lawmakers nor the many advocacy groups regularly critical of the tech platforms claimed the industry was at fault (and that’s despite emerging evidence that suggests tech founders and CEOs may have goaded each other into a bank run through a series of private Slack messages).
O’Mara said intensifying feelings of suspicion and contempt for the federal government in Silicon Valley caused a group of what she called “extremely online venture capitalists” to believe Washington would blame and punish the tech industry for SVB’s collapse.
“There’s always been a bit of, ‘Oh, the government is going to come in and ruin the innovative magic that made Silicon Valley what it is. Government bureaucrats don’t understand what we do,’’’ O’Mara said. “It’s taken on this kind of culture war tone in recent years.”
While that perception is largely inaccurate — O’Mara said light regulations, beneficial tax policies and a flood of federal R&D dollars have “made Silicon Valley what it is” — she said it persists because tech executives and investors largely fail to recognize (or understand) Washington’s role.
“That’s another hallmark, unfortunately, of the Valley,” said O’Mara. She noted that many of the tech industry’s leading lights are programmers with a “savant-like focus, who have done nothing but that all their lives.”
“They have had so little interest in, or respect for, regulatory mechanisms that they actually don’t know these things,” O’Mara said. “And they presume they’re dysfunctional.”
When asked whether she thinks the bailout will force the industry’s top investors to rethink their view of Washington, O’Mara’s answer was succinct.
“No,” she said.
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( With inputs from : www.politico.com )
“Imagine if politicians’ campaign funds were in SVB. Does anyone think we wouldn’t have had more action & communication?” Democrat Rep. Ro Khanna, whose Northern California district is home to the bank, tweeted on Saturday afternoon.
So far, the Federal Deposit Insurance Corp. has offered little clarity on what might happen to SVB’s more than $150 billion in uninsured deposits that support thousands of high-tech startups and health-care companies across the globe. After briefing House Financial Services Committee members on Friday, the agency on Saturday postponed a meeting with California lawmakers whose districts are among those most affected by the crisis, frustrating the Congress members.
As agency officials race to make sense of SVB’s massive loan portfolio and accounts, speculation is swirling over whether the bank will be acquired or sold off in pieces — or if a government-funded bailout might be in the works. Treasury Secretary Janet Yellen has convened regulators to monitor the fallout.
The crisis is also reigniting a fierce debate over the regulations that should be applied to large regional lenders — which are much smaller than megabanks like JPMorgan Chase and Bank of America but considerably bigger than most of the country’s nearly 5,000 banks. Congress voted in 2018 to loosen regulations on those institutions with bipartisan support.
Sen. Elizabeth Warren (D-Mass.) is renewing calls for strengthening oversight and bolstering measures that reduce bank reliance on debt — something that Fed officials have identified as a top priority. Banks have launched a lobbying onslaught to resist those efforts.
“Silicon Valley Bank’s collapse underscores the need for strong rules to protect the financial system,” Warren tweeted. “Regulators must not buckle to pressure.”
Are other banks going to collapse?
That’s the question on everyone’s minds, but there’s no reason to panic, at least not yet. For one, it’s rare for a larger bank to have customers so concentrated in one sector like high tech. And the fact that almost all of the bank’s deposits weren’t insured by the FDIC (we’ll come back to this later) made it unusually prone to a run. The current evidence suggests the bank would not have failed if the depositors hadn’t panicked.
“This is another wake-up call: you need to look at liabilities too,” not just the quality of assets like loans, said Sheila Bair, who led the FDIC during the 2008 financial crisis. “Institutional money seeking [higher] yield is not stable.”
It’s clear there were some risk-management failures by the bank, which was supervised by Federal Reserve examiners from the central bank’s San Francisco branch. Other institutions — and their bank regulators — are no doubt taking another look at their own cash management and how much they’ve exposed themselves to rising interest rates.
But even as markets grew squeamish about other regional lenders after SVB’s failure, megabanks have been largely insulated. That’s because they face stricter rules that, among other things, ensure they could sell securities at a loss and still cover heavy outflows.
Still, it’s hard to know what anxiety might bring to some corners of the banking system.
“There’s no doubt in my mind: There’s going to be more. How many more? I don’t know. How big? I don’t know,” former FDIC Chair William Isaac, who led the agency through hundreds of bank rescues during a period of soaring inflation and rocketing interest rates, said in an interview. “Seems to me to be a lot like the 1980s.”
What happens next?
The simplest option for the FDIC is to find a buyer. Usually, when a bank fails, the agency finds another bank to purchase it, and the transition for customers is relatively smooth. In this situation, the FDIC took control of the bank’s assets in the middle of the day on Friday, rather than its typical practice of waiting until the end of the day, suggesting immediate action was necessary.
It’s unclear whether any bank would be in a position to buy SVB in its entirety; a few of the megabanks aren’t legally able to buy other institutions because they already control a heavy percentage of U.S. deposits. But some other large banks could theoretically do it. The question is whether they’d want to and under what terms. Otherwise, the FDIC will have to sell off the bank’s parts, a process that could take years.
In the meantime, customers whose funds are insured by the FDIC will be able to access their deposits “no later than Monday morning.” The problem is, some 96 percent of deposits at SVB aren’t insured. That’s because there’s a $250,000 limit per account owner per bank, and its customers generally had balances well exceeding that threshold.
For now, the FDIC says uninsured depositors will receive a dividend and a certificate for the rest of their funds, though they’d also likely begin to get more money as the agency sells off SVB’s assets. And there are still scenarios where all depositors get their money back, particularly since any losses would be borne first by creditors to the bank.
There are also multiple ways the government could make SVB’s customers whole, such as guaranteeing all its deposits. The FDIC would likely need sign-off from two-thirds of the Fed board and the Treasury secretary to take such a move.
It’s possible they might be hesitant to take those steps since they have spent more than a decade trying to convince everyone that large banks shouldn’t expect bailouts when they mess up. But it depends how concerned they are about problems feeding out to the rest of the financial system.
How are Silicon Valley Bank’s customers reacting?
SVB was a key banking partner for thousands of venture-backed startups. The bank’s rapid descent into receivership forced companies to seek other banking partners — and funds — in order to stay operational.
“That’s all we’ve been dealing with for the past 48, 72 hours,” Mislav Tolusic, co-managing partner and chief investment officer at the venture firm Marlinspike Partners, told POLITICO. “Most companies in the US are on bi-monthly payroll cycle, which means the next one is on Monday.”
Rippling, a payroll services provider, was unable to send out paychecks for clients after the funds were trapped on the defunct bank’s payment rails. Roku, which manufactures streaming devices, disclosed it had more than a quarter of its cash — nearly half a billion dollars — deposited with SVB. The venture-backed toy store Camp sent an email to customers on Friday alerting them that they no longer had access to their accounts and kicked off an online sale — promo code BANKRUN — in an attempt to raise money.
The crisis has also rippled across a network of defense and biotech startups that are now unable to access their accounts.
Eliot Pence, the chief commercial officer at defense contractor Cambium, said his company will be unable to pay for necessary employees and materials until its bank accounts are restored — threatening the fulfillment of a Department of Defense contract.
“We can’t do any of that until we have clarity about cash flow and the status of SVB going forward,” he said. “I want to stay in business.”
Eleanor Mueller contributed to this report.
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( With inputs from : www.politico.com )
“Democrats, for the whole time I’ve been here, say: ‘Social Security is easy to fix, just raise taxes,’” Coons said, adding that he supports that position. “Republicans refuse to do that. Republicans say ‘this is easy to fix, simply raise the age of eligibility or [otherwise] reduce benefits over time.’ Democrats refuse to do that.”
Coons’ description of the two parties’ entrenched positions helps explain why the Senate entitlements group — led by Angus King (I-Maine) and Bill Cassidy (R-La.) — is offering few specifics about what exactly their months-long work entails. Not only is the King-Cassidy gang not done yet, but its members are keenly aware that as soon as they unveil a plan, it’s going to come under immediate attack.
King and Cassidy are taking a “very different” approach to try and avoid those pitfalls, Coons said. But this still isn’t “The West Wing,” the TV show where a fictional president cut a bipartisan Social Security deal in a single day.
“People are a little nervous,” said Senate Majority Whip Dick Durbin (D-Ill.), who voted for a Reagan-era Social Security fix in the 1980s. “Right now it’s not a welcoming context for a bipartisan solution with big changes.”
Cassidy’s response: “Is there ever a good time? The answer is always no.”
Meanwhile, their group isn’t the only corner of Washington where there’s fresh interest in changing Medicare, Social Security or both. President Joe Biden will propose raising Medicare taxes on high earners as part of his budget this week. Progressive Democrats want to remove a $160,000 payroll tax cap in order to shore up Social Security.
But when concrete policy ideas get proposed for the two retirement programs, it usually gets ugly, and fast, as King and Cassidy may soon find out. Case in point: Republicans shot down Biden’s Medicare proposal hours after he rolled it out Tuesday.
Senate Minority Leader Mitch McConnell immediately torched the pitch as “massive tax increases.”
“That is a Band-Aid, that is not a fix … it doesn’t do anything but win him political points,” Sen. Thom Tillis (R-N.C.) said of Biden’s plan. “It’s pretending that he’s making headway, but he’s being dishonest with the American people. You can’t fill that bucket with the few drops he’s talking about.”
Tillis also criticized former President Donald Trump for taking a hard line against any structural changes to entitlements. Trump’s attacks on potential 2024 presidential rivals Nikki Haley, Mike Pence and Ron DeSantis have jolted the GOP and divided the party over how to handle popular programs that, according to some estimates, could have serious problems within a decade absent significant changes.
But 10 years might as well be an eon in Congress, where imminent problems are far more likely to force action. Former President Ronald Reagan and former Speaker Tip O’Neill cut their 40-year-old Social Security deal amid fast-approaching fiscal calamity — which today’s negotiators fear may happen again for no reason other than politics.
At the moment, Cassidy said only that his and King’s unfinished proposal may include automatic triggers that would kick in to make necessary fiscal changes to preserve Social Security. Even so, it’s pretty hard for Capitol Hill veterans to envision solving long-running entitlement funding problems while more immediate challenges, like the debt ceiling, remain unaddressed.
Speaker Kevin McCarthy has ruled out entitlement changes as part of this year’s debt limit negotiations. And in the immediate future, most Republicans would much rather look at almost any other kind of spending.
“We need to be working on the national debt. That’s not the place to start,” Sen. Tommy Tuberville (R-Ala.) said. “Social Security/Medicare right now is not in great shape, but it’s not to the point we need to be messing with it.”
The Democratic Party could be even harder to sway. Biden has cast himself as a firm defender of the two programs, and his party marshaled a broadside against Sen. Rick Scott (R-Fla.) for suggesting last year that all government programs should sunset after five years. Recently, Scott clarified that his idea would not pertain to Social Security and Medicare, but he’d already put Democrats on offense on the issue.
Which means anything that smacks of cuts — hitting current or future retirees — is going down in flames with Biden’s party.
“There is zero chance we’re going to reduce Social Security benefits now or in the future,” Sen. Brian Schatz (D-Hawaii) said. “So if we want to talk about how to make this program stronger, let’s do it. I think we win the argument.”
Schatz’s preferred solution is lifting the cap on payroll taxes that fund Social Security and increasing benefits. But Republicans are generally not in the business of considering tax increases, particularly with a presidential election next year.
So Democrats’ proposal to bolster both Medicare and Social Security with some tax increases is not going to fly with most Republicans.
“No, it’s not,” Sen. Kevin Cramer (R-N.D.) said. “But what I hope it leads to is a more complete discussion.”
If that’s what’s happening behind closed doors among King and Cassidy’s group — which numbers roughly a dozen senators, according to two people familiar with the talks — then the hardest part is yet to come. Should they eventually agree on any final proposal, King and Cassidy need to create buy-in across Congress, including party leaders in both chambers.
“There’s the policy. There’s the politics and the process. The policy is absolutely ready for primetime,” Cassidy argued. “The politics and the process is what we have to work now. We have a strong bipartisan group in the Senate, but until you get the White House and the House of Representatives … you really can’t go far.”
Both men face their own competing pressures as they lead the group. Cassidy voted to convict Trump in his second impeachment trial and got intimately involved in the last Congress’ bipartisan gangs, moves that both raised eyebrows among conservatives. And King, an independent who caucuses with Democrats, is taking a significant risk looking at entitlements as he pursues a reelection campaign in a state with one of America’s oldest populations.
King said he hasn’t spoken to Senate Majority Leader Chuck Schumer about the group’s work, in part because he doesn’t yet have something concrete to present. But when he does, he seems to think it’s a risk worth taking.
“It’s tough. There’s no question. But to not do anything, there’s no doubt about what’s coming at us,” King said, referring to projections of Medicare and Social Security insolvency. “I came here to try and solve problems. And this is a big one.”
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( With inputs from : www.politico.com )
“The collective attitude of the West” led by the United States needs to change towards Moscow, Peskov told Izvestia daily in an interview.
“The security of one country cannot be guaranteed at the expense of the security of another,” Peskov said“.
Last week, President Vladimir Putin issued a warning to the West about the war in Ukraine and announced Russia’s decision to suspend its participation in the recent START treaty after accusing the West of direct involvement in attempts to strike its strategic air bases..
\"The security of one country cannot be guaranteed at the expense of the security of another,\" Peskov said<\/span>\".<\/span><\/p>
Last week, President Vladimir Putin issued a warning to the West about the war in Ukraine and announced Russia's decision to suspend its participation in the recent START treaty after accusing the West of direct involvement in attempts to strike its strategic air bases.<\/span>.<\/span><\/p>
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( With inputs from : pledgetimes.com )
Thousands of people gathered in the center of Mexico City to protest against the electoral reform proposed by the López Obrador party.Isaac Esquivel (EFE)
“The United States supports independent and well-resourced electoral institutions.” With these ten words, the Department of State has entered into the controversy over the reform of the Mexican electoral authority, the National Electoral Institute, the INE. Washington has issued a statement a day after 100,000 Mexicans took to the streets in various cities to defend the autonomy of the organization in the face of the changes proposed by President Andrés Manuel López Obrador and his party, Morena. “All over the world there have been challenges to democracy that have tested and continue to test the strength of independent electoral and judicial institutions,” said Ned Price, the Foreign Affairs spokesman for the Joe Biden government.
In this way, Washington recognizes the “intense debate” that is taking place in Mexico between supporters of the government and the opposition, which has found in the defense of the electoral authority the best cause to unite weakened and dissimilar groups. This discussion reflects “a dynamic democracy”, according to the Americans. The State Department, headed by Antony Blinken, indicates that an independent electoral authority and respect for the judiciary are vital to have a healthy democracy. The opposition assures that these are under siege by the Mexican president and the Morena politicians in the Legislative. From the government party, for its part, they have linked the president of the organization, Lorenzo Córdova, with the opposition side.
This is the second comment that Washington issues in the context of the opposition demonstration. “Today we see a great debate on electoral reforms that test the independence of electoral and judicial institutions,” he wrote on Twitter late afternoon. Sunday Brian Nicholsthe Assistant Secretary for Western Hemisphere Affairs, an area where Mexico has great weight as one of the main partners of the United States.
In Mexico today we see a great debate on electoral reforms that test the independence of electoral and judicial institutions. The US supports independent electoral institutions that have the resources to strengthen democratic processes and the rule of law.
Although Washington indicates in its communiqués that it respects the sovereignty of Mexico, the issue has strained relations between some of the authorities of both countries. Last week, Ignacio Mier, the leader of Morena in the Chamber of Deputies, asked Americans to “keep their comments” on the electoral reform that his caucus pushed through the Legislature last year, popularly known as Plan B.
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Last week the legislative process of said reform was consummated. The senators from Morena imposed their majority in the upper house to complete the transformation of the INE, which will see its structure decimated despite the fact that it is in charge of organizing thousands of elections in the country, helping the 32 electoral institutes. Plan B also makes it more difficult to punish public officials who meddle in campaigns. To ensure approval, the majority block, made up of Morena and her political partners, withdrew from the table a clause that allowed the transfer of votes between the parties united in an alliance. This provision, called “eternal life”, was postponed.
In accordance with The New York Times, Morena’s plan B set off alarm bells among US diplomats. The newspaper assures that the United States embassy in Mexico has sent messages of concern to Washington about the background of the electoral reform. The Biden Administration, however, had remained silent on the issue. Until this week’s messages.
This morning, during his daily conference, President López Obrador, as expected, charged the protesters. “Strictly speaking, they don’t care about democracy, but what they want is for the predominance of an oligarchy to continue, that is, a government of the rich, of the powerful; They don’t care about the people,” said the president.
The message issued from Washington not only endorses the role of the electoral authority, a body that ceased to depend on the Executive in 1996, but also recalls the importance of judicial independence. The clash with the judges of the Supreme Court will be the new episode between the fight proposed by López Obrador. It will be the constitutional judges who must analyze the unconstitutionality appeals to which the opposition will appeal to stop Plan B of the electoral reform.
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( With inputs from : pledgetimes.com )
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