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New York of course, Joe where Donald Trump has had to spend most of his days over the course of the many weeks since April fifteenth, when his criminal hush money trial began. But we could be closing in on the end of the amount of time he'll have to spend in New York. Not this week but next Tuesday. Closing arguments, according to Judge Murshawn in this case are set.
Yeah, I guess the jury will have a long holiday weekend hopefully along with you as well, not sequestered as they deliberate until next week.
So this will be interesting.
Not that I expect a sequester that's probably not going to happen in this case, but interesting to watch Michael Cohen wrap up his testimony here because it's unclear Kayley, who's going to come next.
Yeah, there's a question around FEC official former one whether he could testify on the depart on the part of the defense, because the defense would like to make clear what exactly the rules are here, I guess, but it seems that there's been a lot of back and forth with the judge and what in terms is actually permissible of testimony from that witness. And of course we also still have the question around Donald Trump himself whether he takes the stand. Most experts would tell you he won't.
These are the big questions we posed to.
Jim Ziron, I'm glad to say is back with us from World Headquarters in New York. Former Assistant US Attorney for the Southern Districts of New York. Jim, it's great to see you. Thank you as always for joining us. I'd love to know your thoughts on whether Donald Trump would maybe should or two different questions here testify. But first let's talk about Michael Cohen as he survives cross examination and is now going through redirector actually, I guess in a break at the moment, which gives us a
good chance to take note of where we are. How did Donald Trump's defense attorneys do here in trying to frame the narrative around someone they say is a witness with no credibility.
Well, I think they landed a few blows and perhaps showed some inconsistencies. They also brought out something which had been brought out on direct examination, that Cohen had stolen
money from Trump. But all that simply goes to the issue of the ultimate issue of credibility, which is for the jury and on cross examination, defense lawyers often score some points the witness Cohen is now on redirect Susan Hoffinger is a terrific prosecutor, and I assume she's going to bring out through questioning Cohen's clarifying testimony about the famous telephone conversation that he claims he had with Trump when the text messages show that they were discussing some
other subject. There were many other telephone conversations the October twenty six conversations, notably that Cohen had with Trump, and the basic point is that Trump approved of the payment to as Stormy Daniels and approved of it being delivered to Stormy Daniels in the way that it was with the circumstances of concealment.
So Jim, as we think about whether or not ultimately the jury is going to find Michael Cohen to be credible and trustworthy as it formulates its thought process on exactly whether Donald Trump should be acquitted or convicted of these crimes. Would any further testimony from witnesses the defense calls ultimately matter, assuming one of them is not going to be Donald Trump. What does an FEC expert witness have to do with whether or not Michael Cohen told the truth?
It's not going to really affect the credibility of Michael Cohen. And there are a number of witnesses they might call whom they're not going to call. They really the only person who can contradict Cohen as someone in the jury won't believe either, and that's Donald Trump. And if he takes the stand, he'll be subjected to vigorous cross examination and he'll have to commit perjury to deny that he
knew about the reimbursement of payment. He can be asked a series of questions that he really can't answer without incriminating himself, such as, you sign nine checks. You're a micromanager, right right? And you sign checks unless you know what they're for? No, not usually? And did you see the invoices that related to those checks? No, I didn't I show you the voices they say they were for legal services from Michael Cohen. What legal services that Cohen rendered
to you? It was supposed to be pursua to a retainer agreement. Where's the retainer agreement? And Trump can't answer those questions and without incriminating himself, And so most lawyers would say it's an act of malpractice if they call him to the stand, because he'll just dig himself in much deeper.
He wrote a fascinating opinion piece in The Hill about this Jim in which you say that Donald Trump likely will not take the stand. But if he does not, as most people believe, there will always be the suspicion in people's minds about why.
He chose not to.
Is this a real conversation you think inside his legal team right now?
Well, there are two courts that are considering the guild or innocence of Donald Trump. One is the Court of Justice on Center Street in downtown Manhattan, and the other is the Court of Public Opinion. In the Court of Justice, the prosecution is not permitted to comment on the defendant's
failure to take the stand. In fact, the judge can charge the jury that they had draw no inference from his failure to take the stand, Although judges frequently talked to defense counselor before they even give such a charge. The prosecutor can say that you heard the evidence presented by Michael Cohen. It's largely corroborated, and none of it is contradicted, and that will have a telling effect on
the jury. In the court of public opinion, the political court, it certainly ought to weigh strongly with voters who haven't already committed themselves that Donald Trump did not take the stand and never denied the charge that he made this secret payment of hush money to Stormy Daniels in order to influence the outcome of the twenty sixteen election. That's the charge on which the jury will deliberate.
And of course, Jim we also know, based on polling, including polling Bloomberg has done with Morning Consult in the past, that if he becomes a convicted felon, especially in swing states, voters may be less likely to vote for him. So it just does become a question of whether ultimately that conviction happens. How difficult is it going to be in your mind, given all of the testimony that has been heard, the arguments have been made for this to not end up, say in a hung jury or even an acquittal.
Well, the jurors will be instructed that what they bring to the courtroom is not their biases, not their political leanings, not their attitudes as to whether they like or dislike Donald Trump. But they're common sense And if you look at the totality of these transactions, they were only accomplished for one purpose, and that was to benefit Donald Trump, to shut up Stormy Daniels and run up to the election, and to make sure she stayed silent until after the
election was over. Because the timing was such that it came on the heels of the Billy Bush tape and Trump just couldn't take another sex scandal, according to his advisors in the Trump campaign. Now the jury understands that, and in closing arguments, you can be sure the prosecutors will make them understand that they're going to return a verdict of guilty after hearing the judge's instructions.
Huh.
I wonder your thoughts on duration here, the extent to which jurors need time. I know that deliberations can take on a lot of different forms. Here, Jim, when this goes to the jury, how long will we wait?
Well, it's hard to say. I think if it's going to be an acquittal, they could come back within an hour. If they're were mowing over the various thirty four counts and mowing over the evidence and asking for the testimony of witnesses to be read back to them. If they're asking for exhibits, it's more likely to lean toward a conviction. If it goes on too long, the judge may deliver
to the jury the famous Allan charge. Allen was a case in the Supreme Court of the United States in eighteen ninety six, and the Allen charge, which is sometimes called the Dynamite charge, basically tells the minority jurors, without probing what the vote is at that point, that they have to follow their conscious consciences and come to a
conscientious inclusion individually. But they should take into account that the majority of the jurors believes something that's different from the conclusion they've reached, and consider whether they have to change their conclusion based not on the fact that the majority rules, but on the fact that the majority may have reasoning for their conviction that is persuasive.
All Right, Jim Zyron, former Assistant US Attorney for the Southern District of New York. Thank you so much, as always for joining us on balance of power. He of course joining us from our headquarters up in New York and the New York City is where Donald Trump is again today as we have this trial continuing to play out, and we know it will do so for at least the next week is closing arguments are set for Tuesday.
In the meantime, when Donald Trump was spending time in New York, he was traveling this weekend, including an appearance at the NRA where he gave a speech in Dallas. Joe over the weekend can get into that in a moment while, But Joe Biden was doing some traveling of his own, including to Atlanta where he gave the commencement address at Morehouse College. There were some silent protesters while he was speaking, and he referenced specifically the ongoing war in Gaza.
Here he is, it's a humanitarian crisis in Gaza. That's why I've called for an immediacasfire, an immediacy squire stopped the fighting, bringing the hostage's hold, and I've been working on a deal as we speak working around the clock, the leading international offer to get more aid into Gaza. Three Bill's Oza. I'm also working around the clock for more than just one ceasefire. I'm working to bring the region together, working to build a last endurable peace.
President Biden at Morehouse College over the weekends and anticipated address. There were a lot of concerns about protesters.
In that speech.
It largely did not materialize, though there were a handful about a half dozen students and I believe one educator who turned their backs to Joe Biden while he was speaking.
One raised a fist. That was it.
He did acknowledge them during his speech and talked about the right peaceful protest. Laura Davison is with us right now at the table, Bloomberg Politics editor. Coming off of all of these speeches over the weekend, Laura, it's good to see you. Did Joe Biden get done what he was looking to get done here in terms of delivering
a message. It wasn't just more House last week. He had a series of events over the course of four days to address black voters in this country, which has been a real deficit for him for many issues, including his policy in Gaza.
He did he got through all these events without any sort of major flub as well as, you know, without facing the protesters that were considered to be a major threat to the speech. Potentially very disruptive, you know, silent protesting, and in some ways it's sort of a smart strategy because you get to remain in the room, you become mbunctious, of course security will escort you out. So this is both sides were able to sort of notch a win in this one. You'll note that Donald Trump is also
taking note of Biden's outreach to black voters. He himself has an event planned in the South Bronx later this week kind of build as being a way to reach out to minority voters and talk about how Joe Biden's policies have you know, in his words, failed black and Hispanic voters. So we're kind of seeing that both both sides play this out in their own way.
On the subject of Donald Trump over the weekend, we heard him say a number of things in that speech in Dallas, but among them suggestions that maybe he could be in not just for a second term, but a third Laura, is that real? We've seen iterations of that kind of language from him before.
Yes, So this is this is the way that Trump sort of like hintset ideas without totally crossing the line. So the way he kind of talked about this was like, well, if we want in twenty twenty, technically I would be winning a third time and so this would be like be my third term. But though obviously he hasn't been president for the past you know, three and a half years, and so this is you know, him sort of flirting with different ideas, flying floating a trial and seeing what
kind of reaction it gets. This is the same thing with the Dictator for a Day kind of comment. You saw a really you know, strong reaction on that. So this is kind of what he's doing of playing around, being careless with language and sort of seeing what the response is.
It's hard not to note that Donald Trump had some trouble on stage at both of his events this weekend in a way that would have probably been very big news if it had happened to Joe Biden. On Saturday nights, he almost kind of stumbled off the podium, which was rickety. To his credit, he called out the contractors in the room for it, and he froze in front of the NRA, it would appeared to be freezing at least he stopped talking for longer than thirty seconds at one point yesterday.
Wouldn't that be a big story if it were Joe Biden? How come it's not for Donald Trump?
This is he has been able to evade the age issue in a way that Joe Biden all include Mitch McConnell as well, has not been able to. You know, he famously had you know, froze in several high profile speeches and press conferences, and it's been a major issue and you know, kind of effectively ended his terms as majority leader in the Senate or a Republican leader in
the Senate. So this is the thing though, that if it keeps coming, it's going to be a problem for him over the next several weeks and months.
All right, Laura Davison, Bloomberg Politics Editor, thank you so much. I would note that when he did pause there was music playing. That's true, so maybe it was partially for dramatic effect, but to your point, show it lasted for a considerable amount of time.
Yeah, and it look at maybe nothing, But I always find it interesting what people pay attention to.
Lot more ahead on Balance of Power. This is Bloomberg.
You're listening to the Bloomberg Balance of Power podcast. Kens just live weekdays at noon Eastern on Apple car Play and then roud Oto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa Play Bloomberg eleven thirty.
It's a new week here in Washington as well, although it seems like at least in the United States Senate, they're going to be dealing with an old issue because, according to the Senate Majority Leader Chuck Schumer, who sent a Dear Colleague letter out ye yesterday, the Senate will return to the pressing issue of our nation's border security. He went on to say, Joe, the Senate is prepared to take up the Bipartisan Border Act as a standalone
measure this coming week. For those who forgot, this was the deal negotiated between Republicans and Democrats in the Senate, and the White House never made it for a vote the first time around. Donald Trump maybe had a helping hand and killing that effort. But I guess if at first you don't succeed, Joe, try try again.
Or message message again. Because no one sees this passing. And we're going to spend the next ten minutes with our panel here looking at this same strategy being employed on both sides of the aisle. This is Washington. This is also partly why people hate Washington. So let's get into.
This right now. Kaylee, you're right.
The border is coming to the floor this week in the Senate, and there are about five Democrats who this is happening for as Chuck Schumer tries to get everybody on the record, So frontline democrats course running for reelection in difficult states, we'll be able to say, hey, I fought for securing the border. Genie Shanzino is with us Bloomberg Politics contributor of course, democratic analyst, and I should note as well now senior Democracy fellow with the Center
for the Study of the Presidency in Congress. Congrats on that new addition to the business card. Genie Chapin Fay, republican strategist from Actum, is also with us here. So Genie, why don't you get us started on what it is we're actually seeing because nobody expects that border bill to pass.
What's Chuck Schumer trying to do?
Well?
This is what we see in Washington during the summer of a really tough election year. And so Chuck Schumer is reading the same polls we are, and he knows that Democrats have a problem when it comes to immigration. He wants to mitigate that problem as much as possible. He wants to give his five really vulnerable senators, you know Rose in Baldwin, Tester, the group Casey vote that they can go back to their constituents and say we
voted for a tougher border bill. And of course it doesn't hurt if he also is able to say that Democrats are not in this box that Republicans seem to think they are in immigration, that they have a plan and a policy to address it. But oh, Donald Trump sunk that some time ago for political reasons. So it is a purely political vote. It has no hope of going forward. And of course it's not just Republicans who will vote against it. It's Democrats, some progressives, and some
Hispanics like Padia and Menendez. So it's going to be a show vote, if you will, of the best kind in an election year.
Well for those Republicans who vote against it. Chapin, how problematic is this for them. Our voters not wise to the idea that they may have had a chance to vote for some stronger measures of the border and didn't.
Yeah, I think you always run that risk. But I think that if you look at the data and the polling and sort of in these areas, I don't think that Republicans are getting the blame for immigration. So I think the American voters know that this is a show vote. They know that it's a little cynical. And again I'm not really disparaged Democrats for doing it. Republicans do it as well, but it is certainly cynical election.
To your deploy.
I think voters can see through that, right, and they know that allegis piece of legislation is not going to fix everything that's broken in immigration system. So it may have somewhat of a small desired effect, but it's not going to It's not really going to hurt the Republicans
on immigration. I just don't see anything the left or Biden can do that would hurt or take the issue away unless Biden came out with some very forceful plan on closing the border even temporarily, you know, or doing any of that kind of stuff.
That might have an effect.
That might if you you know, a good test case is if you look at what Congressman Swasey said in his election in this special election against Mazie Phillips recently, he took immigration away from her. But he's a moderate, almost a conservative on some issues, and he went all the way to the right on that issue. That was the way he took it away from her successfully. I don't see the Democrats doing that, So I don't think
this vote is going to have as big a desired effect. Well, like you just said, Chapin, this is a strategy employed by both sides, and I think this is indicative of where we are here in the congressional calendar and the election cycle. Pretty much everything from here on out is probably going to be a messaging bill. There's a new
one on in vitro fertilization. Katie Britt and Ted Cruz, two Republican senators of course, out with this bill to protect IVF following the Alabama state ruling that got this onto the front pages of the front burners and so forth. And we should note that the Alabama legislature has already active. This is not a thing, but they're looking for a national answer to this with a op ed on the
Wall Street Journal this morning. In a sit down interview with Bloomberg's and Marie hor Dern, who asked why this is needed.
Here's Ted Cruzma Supreme Court decision came out. There was a lot of confusion, there was a lot of fear, there was a lot of misunderstanding, and people did not want anything to threaten IBF. I agree with that, Katie agrees with that, and so we came together and said, let's draft a simple, straightforward federal bill that creates a federal right that you, as a parent, have a right to have access to IVF. If you want to have a child and you need medical assistance to do so,
that should be your right. This is a bill I think that should be overwhelmingly by partisan. The Senate should pass this bill one hundred to nothing. We'll see if they do or not, but on the merits, that's what should happen.
GD.
Is this any different than what we're seeing Democrats do with the border. We're certainly tackling two of the most divisive issues in the twenty twenty four campaign here.
Absolutely, you know, I do see differences. The similarities or these are both election year bills. But the reality is Republicans are in this position, and we are in a position in our country where we are being told that women and their fetuses have the same rights under the Constitution. Because of the rights push on Row and because of the overturning of Dobbs. It was a fringe legal theory.
It has now burst up into a national discussion of which Republicans, to your point, are having a difficult time at the ballot box and so they're trying to wiggle
their way out of it. Of course, we saw in the bill, and Anne Marie brought this up in her interview with Senator about Senator Tammy Duckworth's bill and the response from Cindy Hyde Smith when she blocks it was while she wants women and men to be able to have access to IVF, she believes human rights or human life should be protected, and that's the problem Republicans find that sells in people like Cyndy Hyde Smith, and that's
why she blocked that bill. Will have to see what she does on this one.
Well, Chapin if they're trying to get it protecting IVF in virtual fetilization specific fertilization specifically. Obviously, that is a very narrow targeted bill in this wider question of reproductive rates, which seemingly is how increasingly President Biden is framing it. It's not just about the issue of production of abortion but overall reproductive rights. Is one bill on IVF going to be able to fix the messaging problem for Republicans on the wider issue.
I don't think so, but I do think you know, I do see some differences. Yes, this is an election year bill. Yes this is done because Republicans have an issue on this, but it is a substantive fixed to one particular problem. And one of the problems that happens all the time, the one to go back to something earlier that I was asked about, you know, whether these elect year bills are gonna have any effect. One of the problems is they get loaded up and it's not
as clean it's not as clean cut. And we've been through this rodeo before, so the American people know that when an abortion bill is coming to you know, if Ted Cruz is going to get as abortion bill considered, it's going to go way farther once everyone else has their say in it. Same thing with the immigration bills that have been raised in voter a punt like there's some fixes, but then they get laiden down. Sometimes it's
or sometimes it's other things, and there's overreach. It seems that neither party can just do a simple bill and introduce it and get it.
Passed, right.
It always comes out looking crazy, and that's you know why nothing ever gets done. So I do think there's all those issues that go into it, though, I would just say, on the Republican bill, you know, it's one of those things. Do we want to protect the right to IVF?
I mean, yes or no.
It's pretty simple. We could just do a clean bill on that, or we could complicate. They didn't have a go nowhere. I think we know where.
It's going to go.
I guess it is indicative, as we mentioned in the outset though, of the congressional agenda here, Genie, is there anything worth paying attention to between now and November?
Oh, of course, a lot to pay attention to, but probably not much action on the floor in Congress beyond these types of messaging bills. You know, I think the big question in my mind is about funding for next year. But I don't think we're going to get very far at least this summer on that. But you know, my hope and prayer would be that they could do it a lot quicker than they did last year. But don't hold me to.
That, all right, we won't. Geenie Shanzeno, Bloomberg Politics contributor and senior Democracy Fellow with the Center for the Study of the Presidency in Congress, thank you for joining us alongside Chap and Faye today. He's Republican strategist and managing director at ACTAM.
You're listening to the Bloomberg Balance of Power podcast. Catch Just Live weekdays at noon Eastern on Appocarplay and then Rouno with the Bloomberg Business app. Listen on demand wherever you get your podcasts. A watch us live on YouTube.
As we turn our attention to a whole different policy, and that is foreign policy. The operation that's happening in the waters off of Gaza, this temporary peer that the United States has built at great cost to try to get humanitarian aid into Gaza and around some of the choke points that we've seen on land. There are still a lot of questions, Kiley, about whether this is working.
But there's actually some great reporting in the New York Times today, now that it has been put in place, aid starts entering Gaza through US built peer, but officials say it is not enough, and based on our prior conversations with Cindy McCain at the World Food Program, we have a long way to.
Go because we're talking here about hundreds of thousands of people essentially on the brink of famine. Can you get enough aid in to match the scale of the need is really the question. And sure this flow peer may go some way into trying to bridge that gap, but can it go all the way? The answer is probably not. But let's get an experts perspective on this now, and please to say joining us here on balance of power.
Dave Harden the managing director at Georgetown Strategy Group. He is also former USAID Mission Director to the West Bank and Gaza and served as a senior advisor to President Barack Obama's Special Envoy for Middle East Peace. Dave, thank you so much for coming here to Bloomberg Television and Radio. Just how far in your mind does this peer get us toward the goal of being able to provide food aid at scale for those in Gaza. Surely it makes a difference, but just how consequential of one.
It's not enough, and I think you light it out. So Cindy McCain, the Republican, the wife of John McCain, a strong supporter of Israel historically the head of the World Food Program, said that Gaza is facing famine and that famine is creeping south. On the Biden administration side, Samantha Power has also said the same. So what needs to happen is every crossing, all the time, without limit, not includes Rafa and cam shlom Ares, Route ninety six
and more, plus the peer. We need it all. And by the way, the more access points you have, the least valuable anyone particular access point is, and so that reduces risk and chance of attack.
I appreciate the comprehensive nature of your answer there, Dave, but specifically with the peer, this was just anchored in place on Friday and an important step here to completing this maritime corridor.
How much time.
Will you give this before you actually judge whether this is a successful operation.
I mean, I think we need to measure it now because famine is now. But addition, any food coming in is an addition, it's an additive component and it's coming into the middle. The other reason why I actually like this is because it sets a precedent facts on the ground, so to speak, in favor of the Palestinians, where food and commodity and basic imports can come in through a
maritime route. But again, you know, the proof ultimately will be the results as it relates to famine and violence, and this peer will not solve the fundamentals.
Well two, that exact point on the fundamentals, Dave, you say, famine is now, is there any way to bring that famine to an end without a temporary ceasefire agreement between Israel and a MUSS because increasingly it looks like that is farther out of reach.
Possibly. Let me just note that in the Israeli cities of Ashkalon and Ashdahl, which are very close to Gaza, there is no famine, and so famine is hyper localized into this conflict zone. It's manufactured. Therefore it can be unmanufactured. I actually have been arguing that the private sector needs to be able to import, as they did prior to October seventh, the Gosen private sector, the Palestinian private sector,
they were able to solve the last mile. The UN agencies and the donor community were never designed to provide all food for all people indefinitely. So I do think you need a cease fire for shore, but you need a more comprehensive system and marketplace that allows more food to just go in and it kind of reduces the price and the cost you need to flood the market, so to speak.
Spending time with Dave Harden from the Georgetown Strategy Group, I want to get back Dave to the original premise here, because it really is incredible what we're seeing the US going to such lengths involving our millionlitarian a very expensive operation to put this temporary peer in place, knowing of course that our ally may be part of the problem. Right Otherwise we wouldn't have had to go to this extreme.
The gates would be opening for our trucks. We may not have had to resort to an air drop either. So I guess I wonder at this point, when you see the trucks coming in, even those that aren't allowed to come in, is Israel still a threat to humanitarian aid? Or is it about getting past hamas?
I mean, I do I think it's both, but the primary responsibility rests with Israel. Israel is the occupying authority of ourgaza, and so therefore the responsibility to mitigate famine rests with them, and that requires all access from all points all the time. And again it's just separately the case that we have the flood the marketplace. But let me just point out an obvious cognitive dissonance. The US is funding the bombs, the attacks by Israel, the food,
the peer, all sides of this chaotic situation. And I do think that the gap between Net and Yahoo and Biden is deepening. And I like the fact that Gallant has kind of thrown that's the defense minister and in the warkout and on Israel side threw down a gauntlet to Net and Yahoo saying that there had to be a day after plan. Without a day after planning, Homos stays and power, the conflict continues and the famine will
not be resolved. And at the at the end of this, we have two point two million people that are not only in famine, but bearing grievances that will last generations and by the way, malnutrition that will last a lifetime.
Dave, we got news today from a prosecutor from the Intern National Criminal Court. He was asked for applied for arrest warrants to not just officials from HAMAS, but including Israeli officials and Prime Minister Benjamin Netanyahu is one of him. And in this request, in the statement in part it reads, on the basis of evidence collected and examined by my office, I have reasonable grounds to believe that Benjamin Netanyahu goes on to say has responsibility for the following war crimes.
The first one listed Dave is starvation of civilians as a method of warfare as a war crime, contrary to the statute. Is that a valid assessment in your mind?
I mean, the International Criminal Court is not going to be the solution here and it's not going to bring about a resolution more quickly. I agree with the Biden administration on this, But the burden of mitigating famine, which is slightly different than what ICC is saying one hundred percent, rests with Israel as occupying authority. Just there's just no
way beyond that. Whether or not, you know, at the end of the day, they're they're culpable as a legal matter in an international court that probably doesn't have jurisdiction and isn't widely recognized except in you know, a host of other countries, but certainly not in Israel in the
United States. I don't know if that matters, but matters I think will be a diplomatic solution where Netanya who sees a path forward that includes a governing Poalestanian authority in Gaza, a ceasefire, a return of the hostages, and really very quickly an end to the famine. So, I, you know, the IC ces not really the analysis. It could be right, it might not be right. It's not really the analysis that I think is helpful and kind of unwinding and blunting this famine.
He's former USAID Mission director of the West Bank and Gaza, so he knows what he speaks. Steve Harden, it's great to have you back. Dave now Managing director at Georgetown Strategy Group, and always fascinating conversation kale As. We just try to get a sense of what's going on the ground. It's not always that simple.
Here in Washington.
We're hearing new calls now, additional calls for the resignation of the head of the FDIC. This is something we spent time on last week Kayley. Of course, the chair Gruenberg was up there for two brutal days of testimony House and Senate last week. He was grilled by lawmakers, many of them asked for his resignation. Some even went further to call for the stripping of his pension. But now the chairman is speaking, shared Brown, along with others.
The Democrat of the Senate Banking Committee the chair shared Brown today saying in a statement, there must be fundamental changes at the FDIC. Those changes begin with new leadership. That's why I'm calling on the present cident to immediately nominate a new chair who can lead the FDIC at this challenging time. Again, this is a Democrat, very powerful one in terms of financial regulator's oversight.
The scene is potentially the death knell when it comes to his tenure. Ben Bain knows more than we do about it.
He covers this for a living here at Bloomberg, and Washington is with us now at the table. Are we done here? Need a new leader at the FDIC?
Well, Sharon Brown coming out today and calling around the White House to replace him is certainly a significant development. I think some people thought if he was able to make it through these, as you said, two brutal hearings last week, maybe we would get a better sense if he was able to kind of stick around for a while, maybe make it over that really tough hump. Today this
injects a new sense of urgency. Last week we saw Maxim Waters, who chairs the House Financial Services Department, who's the top Democrat in the House Financial Services Committee, come out and actually defends him. Elizabeth Warren also said that he should stay. So there was kind of a feeling that Democrats were going to kind of rally here, and the White Houses avoided saying that he should indeed step
down or be replaced. But yeah, this is a pretty significant development today politically, and.
It's not just Shared Brown who has come out today. Sheila Bear, a former FDIC chair herself, posted on x I have known and worked with the chair for years, but goes on to say this controversy is hurting him and his agency. For his own sake and everyone at the FDICE, he should announce his intention to resign effective with the appointment. The problem is ben if Marty Grimberg goes out, who steps in, who can do so in
time to still try to wrap up the job. On this administration's financial regulatory agenda.
That's a very big question. There is this kind of broader political context here that we really can't divorce from all this. The FDI, see, the FED and the Office of the Controller Currency have proposed this big, sweeping plan to increase capital requirements in Wall Street banks, and Marty Grimberg is seen as a very important piece of getting that done, and any hope of getting that done before
November certainly very complicated. Should he leave, resign be replaced, whatever it might be, because then you would have two two at this agency on the board, two Republicans, two democrats, and Republicans have not shown a lot of love for this proposal, if you will, to put it, to put.
It mildly well, and at the moment when we're seeing some of the more ambitious approaches to that be scaled.
Back, right, So, I mean, this just adds a whole new sense of kind of complexity to this plan. I mean, and that plan really is kind of the cornerstone banking regulation plan during the Biden administration, obviously coming off of last year's regional banking crisis, this was really seen as a really big thing that these regulars were going to get done now without Martin Groomberg. If you were to step down, if you were to be replaced or whatever it might be, that gets a lot more complicated.
So, just to be clear, if someone were to be put into an acting role, they can't cast a vote on that. Shoretically, it has to be a confirmed chair.
So my understanding is that it would be too too and then it would really be on the Biden administration to quickly nominate and confirm someone to actually change the balance there.
That's awfully important.
I mean, there has been reporting this morning that Jamie Diamond is kind of getting what he wants here in this case, or something closer to what he wants.
How would you frame them?
So, I mean so certainly, certainly the banks and bank lobby pushed back vigorously against this, this capital plan. They spent millions, and we saw ads on NFL games, we saw CEOs testifying in Congress. We even saw small business owners fanning out across Capitol Hill talking about how this would potentially, you know this, they would say, impact their businesses.
So anything that slows that down or anything that changes that plan is certainly a win for the big banks because they have fought vigorously to you know, to keep this from really taking.
Hold as it was proposed.
Now it could still change, It could still be altered as it typically would be, and to to to understand, both the FED Vice Chair for Supervision Michael Barr and FED Chair j Powell have both said to expect broad material changes to that plan. So we do expect some changes. How far they go is the ultimate question?
All right? Ben Bain is always looking for the answer to that question a lot with his team here at Bloomberg. It governs financial regulation for us, Thank you so much. So this really is the question, Joe, what is the end game of the Basil three end game? And if Martin Lumberg does indeed resign, is that wood.
Game be a wrinkle in this After all the months that has gone into this, all the effort, it would.
Be quite remarkable.
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