Morning Wire - SVB Collapse & Biden Budget Battle | 3.13.23

Episode Date: March 13, 2023

Silicon Valley Bank collapses, President Biden’s budget proposal, and lawsuits filed against FBI for lack of transparency. Get the facts first with Morning Wire.   Black Rifle Coffee: "Get 10% off your Coffee Club subscription! BlackRifleCoffee.com promo code ‘WIRE’"   Birch Gold: "No-Cost, No-Obligation FREE Information Kit Text “WIRE"" to 989898"   Epic Will: "Get 10% OFF your Will! EpicWill.com/WIRE" Learn more about your ad choices. Visit podcastchoices.com/adchoices

This episode is brought to you by Black Rifle Coffee. Start your morning with America's Coffee from black rifle coffee.com. The collapse of Silicon Valley Bank prompted widespread fear of a domino effect, but Treasury Secretary Janet Yellen says no bailout is coming, but insists this won't be another 2008. The American banking system is really safe and well-capitalized. It's resilient. We have the latest on the second biggest bank failure,

U.S. history. I'm DailyWire, editor-in-chief John Bickley with Georgia Howe. It's Monday, March 13th, and this is MorningWire. President Biden has unveiled his 2024 budget plan prompting fierce debate on Capitol Hill. We break down what's in the president's plan and how it would affect the economy. And the Heritage Foundation files seven lawsuits against the FBI. Thanks for waking up with Morning Wire. Stay tuned. We have the news you need to know. You've seen the impact inflation has had on the stock market, and you've seen the impact it has on your savings. Hedge against inflation by owning gold. Buy gold with Birch Gold and get a free safe to store it in. That's right.

On qualifying purchases from Birch Gold Group now through March 31st, they'll ship a free safe directly to your door. Text wire to 98989898 to get your free info kit on gold and claim eligibility for your free safe. Text wire to 989898 today. The sudden collapse of Silicon Valley Bank at the end of last week has triggered widespread fear of bank runs and a series of responses from federal and banking officials. Here to discuss the latest on the collapse of SVB as Daily Wire reporter Amanda Press-Jacamo. Okay, Amanda, this is a rapidly unfolding story. First, tell us about SVB, the Silicon Valley Bank, and what took place over the course of just a few days. Sure, and yes, there's a lot to unpack here.

So SVB, a top 20 bank, which is seen as the go-to bank for tech startups, collapsed over the course of some 40 hours last week, culminating with the California Department of Financial Protection and Innovation, closing the bank on Friday, and naming the Federal Deposit Insurance Corporation or the FDIC as a receiver in an effort to protect its clients. The event that prompted the crash was SVB announcing on Wednesday that they were being forced to sell a bunch of securities at a loss. That raised concerns among venture capital firms and startups about the safety of their assets, and depositors rushed to withdraw money, sparking a classic.

run on the bank. Some have blamed the banks collapse on the Federal Reserve's interest rate hikes. The Wall Street Journal noted that the rate hikes have caused the value of existing bonds with lower payouts to fall in value, translating to giant unrealized losses for some banks. But some say rising interest rates are no excuse that the bank had plenty of time to prepare. We talked to founder and CEO of Case Capital, Kenny Polkari, about the issue. Here's what he told us. The Fed has been very clear about raising rates, about inflation was a problem, about rates were going to go higher. And they've been talking about it for two years. So this had not come out of left field. This was not a surprise. Now, what does this mean for customers? Will they lose everything if they

don't get out in time? Well, the FDIC will cover the first $250,000, but about 90% of the bank's clients had more than that invested, most of whom did not have additional insurance on their funds. it's unclear how much cash the bank still has, but a New York Post obtained note from a top investment bank estimated that it could take anywhere from 60 days to up to two years for clients to get paid out. And even then, SVB clients could get only 80 to 90 cents on the dollar if no buyer steps in. That's an incredibly tough timeline for small businesses and startups who don't even have a huge influx of cash. And that can mean miss payrolls affecting a lot of everyday Americans. Right. Okay, so what's the buzz right now in financial circles? What's the

speculation about what's going to happen or what should happen? Well, there's certainly been a lot of input here. Bill Ackman says he's completely skeptical that SVB will find a so-called white night in the private sector and advised the highly dilutive government bailout focused on depositors. Ackman warned that if action isn't taken and soon, tens of thousands of jobs could be lost. entrepreneur and shark tank investor Mark Cuban, who has an exposure between $8 to $10 million at SVB, made a pitch for the feds to take action too, arguing for smaller companies now at a loss. So the signal from the government right now is that they will not be bailing out SVB. Instead, they're trying to auction off the bank, correct?

Yeah, that's right. Treasury Secretary Janet Yellen said Sunday they won't be bailing out SVB like they did big banks back in 2008, but did say they were very concerned about those with money in the bank. We're not going to do that again, but we are concerned about depositors and are focused on trying to meet their needs. Later on Sunday, the Treasury Secretary, the Federal Reserve, and the FDIC put out a joint statement announcing a resolution that fully protects all depositors of SVB. The statement said clients will have access to all their money starting Monday,

adding that no losses associated with the resolution, will be born by the taxpayer. Yellen also approved a similar resolution for New York-based bank signature bank, which was closed on Sunday in the wake of all this chaos. All depositors there will also be made whole with a promise that, again, no losses will be borne by the taxpayer. The joint statement also noted that shareholders

and certain unsecured debt holders will not be protected, and senior management has been, quote, removed. We should also note that SVB is getting a lot of criticism for its mismanagement over the last year, reportedly failing to have someone in charge of risk assessment for some eight months. Amanda, thanks for reporting. That was Daily Wire Reporter, Amanda Prestoge Jocamo.

Coming up, the battle on Capitol Hill over President Biden's proposed budget. According to a recent poll, 62% of Americans who think about their own death a lot of the time don't have a will. That's kind of like being afraid your house will burn down, but not having homeowners insurance. Don't put it off any longer for just $119 and $1,000, and in as little as five minutes, Epicwill can help you create your last will

and testament, living will, and even health care power of attorney. Their step-by-step online form makes it incredibly easy. All you got to do is fill in the blanks. Go to epicwill.com slash wire to save 10% off your complete will package. That's epicwill.com slash wire. President Biden unveiled his proposed 2024 budget on Thursday, providing a first look at his administration's priorities for the coming year.

The $6.9 trillion dollar proposal, includes billions in funding for social programs and billions more in new tax hikes, will now head to Congress for debate. Here with more on what's in the president's budget and how members of both parties are responding as Daily Wire's senior editor, Cabot Phillips. Hey, Cabot, so what are we looking at here? Well, typically the White House releases their budget with little fanfare, but this time was different as Biden announced the basics of the proposal at a public address in Philadelphia.

And look, it's no coincidence he gave that speech in a swing state. The president really used this budget announcement to essentially tout his liberal credentials ahead of the 2024 election. It's also important to note this proposal is right now more of a political wish list than anything close to a final draft. Because Congress ultimately controls the nation's purse strings, they've got the final say on the federal budget. So think of this as stage one of negotiations. Republicans who control the House are going to be making quite a few changes. Right. We'll get to their reaction. But first, tell us about what's in this budget.

Well, in addition to the standard measures that will fund federal agencies, there's hundreds of billions in new spending for a whole host of issues that liberals have been calling for, including government-funded preschool, climate change subsidies, expanded welfare and government housing, and increased Pell Grants for Black students going to college, among many other things. But the reality is that Biden knows this budget will not pass with many of those measures included. So many of those provisions are nothing more than political nuggets he can mention on the campaign trial. That's a pretty common thing that presidents do with their first initial budget proposal. Right. Now, nearly $7 trillion is quite the prize tag. Where's the funding going to come from? That is a major sticking point right now.

The Biden administration has been very open about the fact that this will require around $5 trillion in new taxes. But they say those hikes will be aimed squarely at America's wealthiest individuals and largest businesses. Most notably, the plan would raise America's corporate tax rate from 21% to 28%. It would also call for a minimum 25% tax on households worth over $100 million and raise the payroll tax on households making over $400,000 to 39.6%. Ultimately, this budget would scrap a huge chunk of the Trump tax reform plan from back in 2017. Now, on the political front, what sort of reaction have we seen? Well, for the most part, Democrats are pleased. They say the plan makes important investments in climate change and will improve what they call racial equity while maintaining increased spending on defense.

One of their main points in support of the plan has been that it would cut the deficit by $3 trillion over the next decade, but that's been hotly contested, not just by Republicans, but also some in the legacy media. For example, the Washington Post editorial board, write a piece entitled, quote, the United States has a debt problem, Biden's budget won't solve it. And what about Republicans? What sort of opposition are we seeing from them? Yeah, to put it simply, they say that the tax hikes would inevitably be passed on to lower and middle class Americans. They point out that higher taxes on businesses typically result in higher prices for consumers down the line, or in many cases fewer benefits for employees. Senator Joe Kennedy from Louisiana had this to say on Fox Sunday. The only way I know how to improve the president's budget is with a shredder.

Republicans also do the budget as being woke, in their words, and focusing too much on social justice and climate change and not enough on actual fiscal responsibility. Texas Senator Ted Cruz, for example, noted on Twitter that the proposal mentioned the word equity 63 times, climate 148 times, environmental justice 25 times, transgender, eight times, and intersects seven times. So they say that the priorities are misplaced here. All right. So what comes next? Well, Republicans in the House Budget Committee have vowed to trim billions off that final number. And so they'll get to work this week on a response proposal that likely cut out many of those social spending provisions that Biden had touted at his speech last week.

but ultimately there likely will not be a formal response offer for a month or so. So this process could take some time. But we'll see what Republicans come up with. Cabot, thanks for reporting. Anytime. That's Daily Wire's Senior Editor, Cabot Phillips. The Heritage Foundation has filed seven lawsuits against the FBI over what they say is the political weaponization of the Bureau. Joining us to discuss is Mike Howell, director of the Heritage Oversight Project.

Welcome, Mike. So you've filed what you're calling a litigation blitz, demand. more information from the FBI regarding several controversies. First, tell us about these FOIA lawsuits. So they range from a series of controversy, starting with essentially knowing how many hours were spent on the January 6th investigations at the expense of actual violent crime investigations. I mean, we know that this country is experiencing a historic crime wave.

There's seven, so I'll go through the rest really quickly. But the Black Lives Matter riots. We want to know why the FBI did not get involved there. It was clearly a conspiracy national in nature with a lot of funding sources. I mean, you can look no further than the Vice President of the United States who was collecting bail money to get some of these violent rioters out of jail. And when they got out of jail, they did quite a bit of damage. We also want to know about FBI partisan political support of the rioters. There's a now famous photograph of a bunch of agents kneeling in solidarity with those rioters.

And we want to know why those agents weren't held accountable. We're also suing for records that relate to the war family and their weaponization of the FBI to basically work the steel dossier into existence and target President Trump. We're also asking for, speaking of President Trump, records regarding the dual standards that were applied when the FBI raided President Trump's Mara Lago home versus the kid glove treatment of President Biden. So the basic theory underpinning all of these lawsuits is the weaponization of the FBI. I'll add as a final note, these are documents that do not belong to the FBI. These are documents that belong to the American people. The law under FOIA says they have to be turned over. We had to go to court to get the FBI to comply with basic law.

Here, I think that shows a vast hypocrisy at the FBI in the highest levels of the DOJ. The Attorney General Merrick Garland has insisted that he's nonpartisan, that he's doing his job in an unbiased way. Meanwhile, we've learned more details about the DOJ's direct involvement in the FBI. rate of Marilago, among other things, is Merrick Garland nonpartisan, as he claims? Oh, absolutely not. I mean, this is someone the Senate should have seen coming a mile away. You can look no further than the implementation of the SpaceX law, which they dust it off the shelves that had never been enforced and they're using it to go after, pro-lifers,

when that's really not a concern that merits the FBI and DOJ being involved. It's this, like, search and constant severe application of any hook that you. can get to go after conservatives. With the Mara Lago raid, that is clearly the, I guess, low watermark for the Garland tenure. There was no reason why 200 plus years of historical precedent in the United States had to be shattered over a document dispute. Also, if you look at the directionality of the constant stream of leaks coming out of the Department of Justice, it tells you only one thing. That is that the Department of Justice is working in concert with the media to drive political narratives that connects with the federal law enforcement. The leaks only go one way. And I'm not aware

of any leak investigation at the Department of Justice to stop this. So the read that I think any reasonable person has is these are condoned, these are directional, these are approved. And I think that's proof positive of the fact that DOJ working with mainstream media is definitely engaged in this political use of law enforcement for their ends. Well, Mike, thank you so much for coming on. That was Mike Howell, Director of the Heritage Oversight Project. That's all the time we've got this morning. Thanks for waking up with us. We'll be back later this afternoon with more news you need to know.