The Hill’s Morning Report — Bank jitters to dominate this week

by Alexis Simendinger and Kristina Karisch - 03/20/23 6:25 AM ET

Editor’s note: The Hill’s Morning Report is our daily newsletter that dives deep into Washington’s agenda. To subscribe, click here or fill out the box below.

March Madness is not just on the basketball court.

Switzerland’s largest bank, UBS, on Sunday said it will buy battered Swiss peer Credit Suisse in an emergency $3.25 billion takeover to try to calm investors and markets (ABC News). Bank stocks and bonds plummeted today in reaction (Reuters).

In the U.S., Congress is unsure how to respond amid fears that more banks are vulnerable to sudden panic by depositors (ABC News). And the Federal Reserve will announce Wednesday whether it will pause or again raise interest rates as analysts and economists debate the inflation picture and prospects of a recession.

Business Insider: Odds are tilting toward a rate hike of 25 basis points at the Fed’s upcoming meeting.

House Financial Services Committee Chairman Patrick McHenry (R-N.C.) told “Face the Nation” that raising the Federal Deposit Insurance Corporation’s $250,000 cap on insured deposits is one policy lawmakers should examine. “What I will do, … legislatively and in an oversight function, is to determine whether or not we need to address the FDIC deposit level,” he said on Su. “We did it after the last financial crisis, raising [it] from $100,000 to $250,000” (CBS News).

Sen. Elizabeth Warren (D-Mass.), a co-sponsor of a new Senate measure, on Sunday told NBC’s “Meet the Press” that Congress can avert future failures such as Silicon Valley Bank’s a week ago by unwinding a 2018 law that eased the strictures of the Dodd-Frank law for smaller and medium-sized banks.

Congress should “go back and take that [deregulatory banking] provision that we passed in 2018, and just roll it back out and say, `No, the Fed doesn’t get that ability to just go to sleep when they have ultimate supervisory responsibilities over these multi-billion-dollar banks,’” the senator said.

Fed Chairman Jerome Powell’s job involves steering monetary policy and regulating financial institutions and “he has failed at both,” she added.

USA Today: The Fed’s higher interest rates have eroded the value of bank assets, meaning at least 186 banks beyond Silicon Valley Bank could be vulnerable to uninsured depositor runs, according to a study by the Social Science Research Network.

Here’s what else we’re watching this week:

▪ House Republicans are strategizing during a retreat in Orlando this week (The Hill and NBC News).

▪ Former President Trump told supporters on Saturday that he will be “arrested” on Tuesday in a Manhattan investigation of hush-payments and urged backers to “protest, take our nation back!” Axios rewinds the timeline of the investigation. The reliability of star witness and former Trump lawyer Michael Cohen’s testimony against his former boss may be questioned today (The New York Times). New York City police are preparing, in case violence results from Trump’s protest instructions (The Hill).

▪ The Supreme Court this week will hear arguments in key cases from Navajo Nation water rights to Jack Daniels whiskey bottles (Roll Call). The court may take up a dispute involving Trump’s former D.C. hotel (The Hill).

▪ Chinese President Xi Jinping arrives in Moscow today to meet this week with Russian President Vladimir Putin. Is China a Russian peer, would-be peace broker or war-time facilitator? (BBC).

▪ In Congress, we’re watching Tuesday’s Senate move to try to repeal two war authorizations against Iraq (The Hill). We’re also watching a TikTok hearing in the House on Thursday as Congress and the administration weigh an all-out ban. What would that look like? (NBC News) Chinese TikTok owner ByteDance has been under Justice Department investigation since last year because of alleged surveillance of Americans (The New York Times).

Related Articles

▪ The Wall Street Journal: “We never thought a bank so successful could collapse so fast.” Silicon Valley Bank’s strength and its close ties to the tech industry also contributed to its failure.

▪ The Hill: Six key players to watch in Washington during the banking turmoil.

▪ The Hill: Warren takes center stage in the banking fight after the SVB collapse.

▪ NBC News: Shrinking savings and rising debt leave consumers on shaky financial footing. Banks are likely to tighten their lending.

LEADING THE DAY

➤ CONGRESS

The future of American food production is up for grabs this year as the nation’s $1.4 trillion farm bill expires this September — along with a wide array of crucial programs that put food on American plates. The House and Senate agriculture committees will hold a series of hearings akin to a large and acrimonious family Thanksgiving, resulting in heated debates with everyone united in the desire to fill their plates.

The Hill’s Saul Elbein has rounded up the five biggest fault lines shaping up this year, from the upcoming battles over everything from $20 billion in climate funding to the question of what to do with the nation’s animal waste.

Climate policies are expected to be an area of contention as Congress takes up the farm bill — particularly as lawmakers weigh whether and how to incentivize farmers to take climate-friendly approaches (The Hill).

Fine-tuning certain sections of the farm bill could help prevent the West from decaying into a Great Depression-era Dust Bowl, according to Sen. Michael Bennet (D-Colo.). The Hill’s Sharon Udasin reports that the senator is on a mission to ensure that the region’s agricultural sector can continue to thrive amid inhospitable climate conditions.

“How do we advance the real challenges that producers and rural communities are facing in the context of a 1,200-year drought?” Bennet asked in a recent interview with The Hill. “In the broadest strokes, I think there’s been a focus more in the Midwest that’s kind of tended to organize people’s thoughts around water quality, not quantity. In the West, we obviously are focused on water quality, but quantity really is the big question.”

AgWeb: Farm bill listening sessions: same things keep being repeated.

Meanwhile, as both parties dig in their heels on the debt ceiling battle, a Republican-backed push to lay out a plan for the government to prioritize certain payments if the Treasury runs out of emergency measures to prevent a default is picking up some traction. The Hill’s Aris Folley reports that while the idea of so-called debt prioritization is gaining legs among some Republicans in both chambers, it’s getting a lukewarm reception from others and has some experts scratching their heads.

Asked about the concept on Thursday, Sen. Lisa Murkowski (R-Alaska) said she understood the “need to have things in your back pocket to understand that, if in the event we had to, we were in this situation, how would you proceed in a manner that, perhaps, least disruptive.”

The House will lose its top antitrust reform champion later this year when Rep. David Cicilline (D-R.I.) departs Congress in June after battling Big Tech, The Hill’s Rebecca Klar reports. By reaching across the aisle, Cicilline, as chairman of the Judiciary’s antitrust subcommittee, led efforts to advance proposals that would revamp laws targeting the largest U.S. tech companies. In an interview with The Hill, Cicilline said he is still hopeful there is still a path forward for the agenda he laid the groundwork for in the House.

“There’s still really strong bipartisan support for that whole package. We had the votes in the last Congress,” Cicilline said. “My sense is we have the votes in this Congress, too. I think what will make it a little more challenging for the next couple of years is the Republican House leadership’s opposition to these bills.”

🦠Senate Majority Whip Dick Durbin (D-Ill.) announced he has a mild case of COVID-19 for the second time since July and will quarantine while working remotely (The Hill).

➤ POLITICS

Trump said Saturday he expects to be arrested in connection with the years-long investigation into a hush money scheme involving adult film actress Stormy Daniels and called on his supporters to protest any such move. In a social media post, Trump, referring to himself, said the “leading Republican candidate and former president of the United States will be arrested on Tuesday of next week.” After Trump’s post, his team said it had not received any notifications from Manhattan prosecutors (CNN).

The former president’s comments have sparked concerns about political violence should his base respond to the call. Anticipation is building this week over a possible indictment. Prosecutors allege the payment to Daniels violated campaign finance laws and reports have suggested Trump may be indicted over the matter, but that timing is unknown (The Hill). Meanwhile, Politico reports that Manhattan District Attorney Alvin Bragg (D) offered a private retort to Trump’s message, telling office employees in an email that “we do not tolerate attempts to intimidate our office or threaten the rule of law in New York.”

▪ The New York Times: Inside the payoff to a porn star that could lead to Trump’s indictment.

▪ NBC News: Law enforcement agencies are prepping for a possible Trump indictment as early as next week.

▪ Politico: Why an indictment may help Trump — and threaten the GOP.

▪ The New York Times: Dissecting charges that could arise from the Trump investigations.

▪ The Atlantic: The Secret Service’s day of reckoning approaches. An indictment of Trump would offer the agency a chance to restore its tarnished reputation.

On the media airwaves, the accelerating New York probe against Trump has a new face. Joe Tacopina made the rounds on TV this week, enthusiastically defending the former president in the court of public opinion, and his style has drawn comparison to that of his client, dismissing the probe as one that should prompt “a healthy dose of disgust from the bar, the legal community, prosecutors, defense lawyers alike” (The Hill).

Former Vice President Mike Pence on Sunday told ABC News’s Jonathan Karl that he believes “in the fullness of time” history will hold Trump accountable for the events of Jan. 6, 2021.

“Well it will be the judgment of history, I truly believe it. And I also think the American people will also have their say,” Pence said. “I mean the president is now a candidate for office again, he’s running for election, but as I go around the country, I’m convinced the American people have learned the lessons of that day.”

▪ The Washington Post: Pence, unmoored from Trump, finds his old voice.

▪ The Wall Street Journal: America’s political divide over Jan. 6 reaches into the FBI. Disputing the Jan. 6 probe’s approach, three former or suspended bureau employees air protests in Congress and conspiracy theories online.

▪ The Washington Post: The Jan. 6 investigation is the biggest in U.S. history. It’s only half done.

Anxiety is growing among Republicans that far-right candidates who failed to cross the finish line last year could come back to haunt them in 2024, The Hill’s Max Greenwood and Caroline Vakil report. Kari Lake, who ran for Arizona governor in November and lost to Gov. Katie Hobbs (D), is weighing a bid for Sen. Kyrsten Sinema’s (I-Ariz.) seat. In Pennsylvania, state Sen. Doug Mastriano is considering a run against Sen. Bob Casey (D) after costing the GOP the governor’s mansion last year. The list goes on, and the growing list of far-right candidates weighing congressional runs has Republicans now warning against writing them off as possible GOP nominees once again.

Democrats are gearing up for another hard-fought Senate race in Nevada next cycle after the state narrowly decided who would control the upper chamber in the midterms. As The Hill’s Caroline Vakil reports, last year, Democrats were able to retain Sen. Catherine Cortez Masto’s (D-Nev.) seat by less than a point but lost the governor’s mansion after former Clark County Sheriff Joe Lombardo ousted incumbent Gov. Steve Sisolak. Republicans say that the state’s shifting demographics and electorate are making the state more friendly to the GOP, particularly in the Senate, where incumbent Sen. Jacky Rosen (D-Nev.) is facing reelection in 2024.

▪ The Hill: Biden’s camp confident he’s up to rigors of campaigning even amid doubts.

▪ ABC News: Trump silent on abortion as ’24 campaign pushes forward.

▪ The Washington Post: Florida Gov. Ron DeSantis’s (R) pivotal service at Guantánamo during a violent year.

IN FOCUS/SHARP TAKES

➤ INTERNATIONAL

A day after the International Criminal Court issued a warrant for his arrest on charges of war crimes, Putin on Saturday visited the occupied city of Mariupol in Ukraine in a symbolic display of bravado ahead of the arrival of Xi in Russia. Mykhailo Podolyak, an adviser to Ukrainian President Volodymyr Zelensky said Sunday that Putin’s visit showed a lack of remorse.

“The criminal always returns to the crime scene,” he wrote on Twitter.

As Putin personally staked his claim to occupied Ukrainian territory, international condemnation grew louder. Germany’s justice minister, Marco Buschmann, told the Bild newspaper that in accordance with the warrant, German authorities would arrest Putin if he set foot in their country. Biden on Saturday also backed the court’s decision, saying “it’s justified.” Russia, like the United States, does not recognize the international court’s jurisdiction, and Kremlin officials described the warrant as unlawful (The Washington Post and The New York Times).

Putin will begin his meeting with Xi at around 4:30 p.m. Moscow time (9:30 a.m. Eastern), according to Kremlin spokesperson Dmitri Peskov, who said the meeting will be “informal but very important” (The New York Times).

▪ CBS News: International Criminal Court issues arrest warrant for Putin over Russia’s alleged war crimes in Ukraine.

▪ NBC News: Putin is a wanted man — a trial isn’t imminent, but the world is closing in.

▪ The Wall Street Journal: At the China-Russia Border, the Xi-Putin alliance shows signs of fraying.

▪ The New York Times: Chinese officials say Xi’s upcoming trip to Moscow is a peace mission. But U.S. and European officials say he aims to bolster Putin.

▪ Politico: The emerging China-Russia-Iran axis may force the United States to choose between some unappealing options.

Former national security adviser H.R. McMaster predicted in an interview on Sunday that more evidence of China assisting Russia in its invasion in Ukraine will be revealed in the coming days and weeks (The Hill).

“China doesn’t want to get caught doing this, right, because at the same time, as they’re helping the Russians murder Ukrainians, they’re also saying, ‘Hey, China is open for business,’” he said on CBS’s “Face The Nation.” “And they’re trying to appeal to American and other investors to continue to prop up their status mercantilist model, even as they commit genocide.”

When Finnish and Swedish officials announced their intention to join the NATO alliance, in a historic shift for both countries, in May 2022 there was talk of a “quick ratification.” The path to membership has been more difficult than initially expected. This week, Finnish officials traveled to Turkey to try to seal the deal, while Swedish officials stayed home. Turkish President Recep Tayyip Erdoğan on Friday announced that Finland’s membership request was being sent to Turkey’s parliament for ratification, paving the way for the alliance to grow.

“It is possible that Finland joins NATO before Sweden,” Finnish President Sauli Niinistö said in an interview published by the Swedish public broadcaster SVT on Sunday. “Should we have refused Turkey’s offer to ratify? That sounds a bit crazy. It would have been a terribly difficult situation if we had said ‘no’ to Ankara.”

Niinistö said Sweden won’t be in a vulnerable security situation even if Finland joins NATO first and Sweden continues to work out disputes with Turkey to ensure ratification of their own bid (The Washington Post and ABC News).

▪ CNN: Turkey to start ratifying Finland’s NATO membership after months of opposition.

▪ Politico EU: NATO is racing to arm its Russian borders. Can it find the weapons?

Biden called Israeli Prime Minister Benjamin Netanyahu Sunday to express “concern” and to promote compromise over Israel’s planned overhaul of the country’s judicial system, which has sparked widespread protests (ABC News).

Politico EU: French President Emmanuel Macron faces no-confidence votes amid nationwide protests.

➤ STATE WATCH

A spate of Republican-led states last week issued new restrictions on abortion access. In Utah, Republican Gov. Spencer Cox signed legislation Wednesday that will ban clinics from providing abortions by next year, setting off a rush of confusion among clinics, hospitals and prospective patients (NBC News). Wyoming Gov. Mark Gordon (R) signed a bill Friday to ban abortion pills from being used in the state, becoming the first in the country to specifically prohibit that form of abortion outside of a full ban on the procedure (The Hill).

In South Carolina, nine state Republicans who had co-sponsored one of the most severe anti-abortion proposals in the country have since withdrawn their support, reversing course on a measure that proposed applying the state’s homicide laws to people who undergo abortions. The bill had received national attention and harsh criticism for its punitive stance. Matt Leber, who was among the first Republicans to support the measure in January, said he decided he couldn’t support the bill’s existing language and realized it had no chance of passing.

“In its current form, I cannot keep my name on it,” Leber told NBC News. “I wouldn’t want to prosecute or charge women at all, that’s never been my philosophy on pro-life issues.”

Politico: Abortion on the ballot? Not if these Republican lawmakers can help it.

Democrats in state legislatures are adding the filibuster to their toolkit when it comes to combating legislation targeting LGBTQ rights, writes The Hill’s Brooke Migdon. Floor action in the Missouri Senate last week came to a screeching halt as a band of Democratic senators filibustered for two days over a bill to bar transgender minors from accessing gender-affirming health care, causing frustrated Republican leadership to adjourn for a scheduled spring break a full day early. Meanwhile, in Nebraska, state Sen. Macheala Cavanaugh, one of the legislature’s only Democrats, started the third week of her filibuster over proposed legislation to ban gender-affirming care and abortion.

“If this legislature collectively decides that legislating hate against children is our priority, then I am going to make it painful, painful for everyone,” Cavanaugh said last month. “Because if you want to inflict pain upon our children, I am going to inflict pain upon this body.”

The recent spate of legislation targeting LGBTQ identities is threatening to negate some of the progress Historically Black Colleges and Universities have made in providing safe spaces for members of the community, advocates warn. As The Hill’s Cheyanne Daniels reports, over the past decade in particular, HBCUs have made a concerted effort to address the community’s concerns, but now some fear the new legislation could have a chilling effect on that progress.

“When you put an LGBTQ inclusive curriculum or you want to start a LGBTQ center on campus but you have to worry about a legislature saying that there’s no value in this so this is unnecessary or we’ll strike out your budget appropriation for this year, it’s very scary,” Leslie Hall, director of the Human Rights Campaign’s HBCU program, told The Hill. “It puts HBCUs in a very, very precarious situation because they’re already underfunded in many cases, and they just really can’t afford that type of treatment.”

A recent barrage of winter storms has helped rescue much of California from years of drought, writes The Hill’s Sharon Udasin. At this time last year, the entire Golden State was coping with drought. Now nearly 64 percent of it is drought-free, after a series of “atmospheric rivers” inundated much of the region with rainfall and heaped piles of snow across the Sierra Nevada mountain range this season — but the influx of water may also come with challenges, including possible floods and continued groundwater shortages.

“Coming out of a drought and having this much snowpack in the mountains and a threat of floods, clearly there is a big interest in squirreling away as much of this water as we can,” Thomas Harter, a professor of water resources at University of California, Davis, told The Hill.

In Florida, CNN reports that residents and scientists are eyeing a giant blob of seaweed twice the width of the continental United States that’s on the move, threatening to dump smelly and possibly harmful piles across Sunshine State beaches around July. Traveling west, the floating mass of sargassum will push through the Caribbean and up into the Gulf of Mexico during the summer.

OPINION

■ How to fix the TikTok problem, by Julia Angwin, investigative reporter and contributing opinion writer, The New York Times. https://nyti.ms/3n1A4Z4

■ The lessons of the Great Depression are being ignored, by Charles W. Calomiris, contributor, Politico Magazine. https://politi.co/3yWygTH

WHERE AND WHEN

📲 Ask The Hill: Share a news query tied to an expert journalist’s insights: The Hill launched something new and (we hope) engaging via text with Editor-in-Chief Bob Cusack. Learn more and sign up HERE.

The House will convene at 5 p.m. on Tuesday for a pro forma session.

The Senate meets at 3 p.m. on Tuesday and resumes consideration of a motion to proceed to a bill that would repeal the authorizations for use of military force against Iraq.

The president will receive the President’s Daily Brief at 10:25 a.m., along with the vice president. Biden and first lady Jill Biden will host a Nowruz reception at the White House at 1 p.m. Biden and the first lady will discuss mental health and well-being with actor Jason Sudeikis and the cast of TV comedy “Ted Lasso.” The president wants to highlight federal investments in mental health counseling and suicide prevention.

Vice President Harris and second gentleman Doug Emhoff will attend the White House Nowruz reception in the East Room at 1 p.m. Harris and Agriculture Secretary Tom Vilsack will speak to the press via conference call to announce wildfire resilience funding at 3:10 p.m., joined by White House senior adviser Mitch Landrieu.

Secretary of State Antony Blinken will speak at11:30 a.m. about the release of a report on countries’ human rights practices as of last year. He will meet at the State Department at 4:15 p.m. with Moroccan Foreign Minister Nasser Bourita.

The White House daily press briefing is scheduled at 2 p.m.

ELSEWHERE

➤ HEALTH & PANDEMIC

The United States has the lowest longevity of the Group of Seven nations, according to a new study released by the University of Oxford and the London School of Hygiene and Tropical Medicine, which examined global life expectancy ratings. Experts suggested the sluggish progress, even as populations live longer, was likely due to worsening health inequalities, resulting in poorer social groups dying earlier than the wealthy (The Daily Mail).

Vox: Why 70 percent of the world’s maternal deaths are in sub-Saharan Africa.

A new analysis suggests bills for hospital care make up most medical debt in the United States — and that low-income people and people of color are disproportionately affected by overdue medical debt. The report from the Urban Institute drew on data from a June survey to get a better picture of the 100 million affected by the issue nationally. Nearly 75 percent of those surveyed owed some or all of that debt to hospitals, the report found (The Washington Post).

“We see that individuals with disabilities, and Black and Latino adults are disproportionately represented among adults carrying past-due medical debt,” Gina Hijjawi, senior program officer at the Robert Wood Johnson Foundation, which partnered with the Urban Institute on the research, said in a statement. “Consumers need standards in place that protect them from undue medical debt and help them obtain affordable care.”

▪ ABC News: COVID-19: A look back on where the U.S. succeeded and where we didn’t.

▪ The New York Times: The World Health Organization accuses China of hiding data that may link COVID-19’s origins to animals.

▪ The Washington Post: Long COVID-19 symptoms are less common now than earlier in the pandemic.

Information about the availability of COVID-19 vaccine and booster shots can be found at Vaccines.gov.

Current U.S. COVID-19 deaths are 1,706 for the most recent week, according to the Centers for Disease Control and Prevention. (Data is reported on Fridays.)

THE CLOSER

And finally … 🌸 Be of good Monday cheer: Spring has officially sprung today, no matter what the thermometer says! In Washington, it’s time for fluffy clouds to seemingly drop out of the sky and adorn the trees as cherry blossom mania takes root.

The Cherry Blossom Festival began Saturday and continues through April 2. “Peak bloom” around the Tidal Basin is “very close,” according to the National Park Service, which offers updates via BloomWatch and points everyone to the Cherry Blossom Cam.

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