Morning news brief
Morning news brief
GOP lawmakers largely back ex-President Trump ahead of his possible arrest. Staff of the Los Angeles Unified School District plan a walkout. Silicon Valley Bank casts a shadow over the Fed meeting.
STEVE INSKEEP, HOST:
What do you do when the leader of your political party faces a criminal investigation?
LEILA FADEL, HOST:
Well, Republicans who control the House are supporting Donald Trump once again. The lawmakers are meeting in Florida, where they had planned to talk over legislative priorities, but the ex-president seized attention by predicting his own indictment in New York today. He hasn't been indicted, but here's what we know about the case. People close to Trump paid an adult film star to cover up her story of an affair. That led to an investigation by Alvin Bragg, the Manhattan district attorney, into falsifying business records.
INSKEEP: Congressional correspondent Deirdre Walsh has been listening to Republicans as they respond to this in Orlando, Fla. Hey there, Deirdre.
DEIRDRE WALSH, BYLINE: Good morning, Steve.
INSKEEP: I hope the spring weather is good down there.
WALSH: It's pretty nice.
INSKEEP: That's good. How are Republicans defending Trump?
WALSH: They're really standing with him, and they're all largely attacking the New York prosecutor. Centrist Republicans, hard-line Republicans are all hammering the same message. They say Manhattan District Attorney Alvin Bragg's investigation is politically motivated, and they say it's an abuse of power. House Speaker McCarthy kicked off the press conference down here for this retreat, fielding numerous questions about Trump's claim that he could get arrested, and also he was asked about the former president's call for supporters to protest. McCarthy repeatedly slammed Bragg. He keeps saying he's playing politics with an investigation. But the speaker did break with Trump, saying he did not think people should protest.
INSKEEP: We should note House Republicans now have power. They have the power to investigate. They have the power of oversight. Are they using that at all when it comes to the former president?
WALSH: They are. They are using it to launch their own investigation of that New York prosecutor, Alvin Bragg.
INSKEEP: Wait, wait, not investigating Trump - investigating the prosecutor who is investigating Trump. Is that correct?
WALSH: That's correct.
INSKEEP: OK, go on.
WALSH: Three committee chair - House Judiciary Chairman Jim Jordan, House Oversight Chairman Jim Comer and House Administration Committee Brian Steil sent a joint letter yesterday demanding Bragg turn over documents, appear in person before their panels. Jordan told reporters yesterday they all want details about Bragg's probe.
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JIM JORDAN: It's obvious that this is a sham, and something that we want to know - were federal funds involved? Did this stem from - it sure looks like it grew out of the special counsel investigation - 'cause those are the legislative concerns we have as Congress.
WALSH: In their letter, they raised questions about whether any federal money that the DA's office received was involved in this particular probe. Bragg, for his part, has not indicated any timeline for when his investigation may be completed. He's just saying he's going to continue to follow the facts.
INSKEEP: I guess it's a familiar story that the political conversation is all about Donald Trump, as it has often been in the past, and less about what Congress might do, what legislation might pass. Do House Republican leaders have anything they want to do themselves?
WALSH: They do. I mean, they are talking about hearings on the banking crisis, passing bills dealing with border security. They have a parents' bill of rights they're talking about that's coming up on the floor soon. But Donald Trump still looms really large over the Republican Party. And this controversy has just really stepped all over their message down here. It just shows he continues to be the dominant player. Lawmakers are denouncing the prosecutor and echoing Trump's message about political bias, but they're not really commenting on the former president's behavior. They're just sort of dismissing the whole thing as, oh, this is all about politics. But privately, I have spoken with several Republicans down here in Orlando who represent swing districts. Some of them are ready to move on and potentially get behind another top Republican on the ticket in 2024, someone like the Florida governor, Ron DeSantis, potentially as the GOP nominee in 2024. But he hasn't announced he's running for president. And I will say lawmakers are really reluctant to get crosswise with the Republican base because Donald Trump is still really popular with their voters.
INSKEEP: NPR's Deirdre Walsh, thanks so much.
WALSH: Thank you.
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INSKEEP: Hundreds of thousands of students are set to stay home today in Los Angeles as the school district halted normal operations.
FADEL: The union representing bus drivers, maintenance workers and other support staff is launching a three-day strike, and the teachers are also staying out of school.
INSKEEP: NPR's Sequoia Carrillo is in Los Angeles. Good morning.
SEQUOIA CARRILLO, BYLINE: Good morning.
INSKEEP: Who's affected?
CARRILLO: So families are really going to be affected on all sides today. The Los Angeles Unified School District is the second-biggest school district in the country, with over 1,000 schools in operation and more than 400,000 students, the majority of whom live at or below the poverty line and depend on schools for far more than just classroom instruction.
CARRILLO: So today, even though schools will be closed, community members and the district know the stakes for many of the students. And they're working with the city and local volunteers to get students things like bagged meals as well as get childcare for working parents. On top of that, there are, of course, scheduled demonstrations all over the city. I'm heading out this morning to the bus depot where members of the Service Employees International Union are starting a picket line at 4:30 a.m. That's when school buses normally start their day. But today they're not leaving the depot. There are also rallies at schools and at the district's headquarters as well.
INSKEEP: Well, what are the workers who will be on those picket lines demanding?
CARRILLO: So to understand how we got here, we need to understand who is striking, I think. The SEIU represents the support staff of schools, so people like custodians, special education assistants, campus aides, even, like, playground supervisors. These are critical roles that we often don't think about in the operation of a school. But their average salary at LAUSD is about $25,000 per year, with many working part time. Bottom line - they're asking for a 30% pay raise over four years, and the district has agreed to a 23% raise over a five-year period with bonuses. But the union hasn't responded to the district's last three offers.
INSKEEP: Well, why would they not?
CARRILLO: They haven't exactly said why, but it's been a very long and drawn-out fight, and they've suggested in the past that they feel disrespected. But on the other side of this negotiation is the current superintendent, Alberto Carvalho. He's been negotiating with the union for more than a year, all the way up until late last night. I spoke with Carvalho yesterday evening, and he said he wasn't leaving the office anytime soon. He's hoping that sometime over the next three days he can come to an agreement with the union and hopefully shorten this strike.
INSKEEP: Although even if he does shorten the strike, doesn't he also have a problem with LA's teachers?
CARRILLO: I wouldn't call it a problem quite yet, but the teachers did have a strike back in 2019 that lasted much longer than this one. It was about six days, and this was prior to Carvalho's tenure. But they're now negotiating a new contract, and they're asking for similar wage increases as the SEIU. But so far, the district hasn't given much, citing concerns over their finances.
INSKEEP: Well, what is the financial condition?
CARRILLO: When I spoke with Carvalho, he said LAUSD is existing in a bit of a financial bubble right now. They've had this COVID relief money, federal dollars, for a while, but enrollment is decreasing year over year. It's also hard to keep teachers positions filled. And Carvalho says he's protecting the longevity of the district with these negotiations. Union leaders say they're protecting their members, who in many cases are living below the poverty line, despite working clearly important jobs. And unfortunately stuck in the middle are the students and parents who will be scrambling today.
INSKEEP: NPR's Sequoia Carrillo in Los Angeles, thanks so much.
CARRILLO: Thank you.
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INSKEEP: The sudden failure of Silicon Valley Bank this month surprised a lot of people.
FADEL: Yeah, but it may not have been a shock to federal regulators. Multiple news reports say they'd been warning about the bank for years before its failure. The Federal Reserve Bank oversees the banking system, so its leaders face questions as they meet in Washington this week.
INSKEEP: NPR's Scott Horsley will be listening to them, as he often does. Hey there, Scott.
SCOTT HORSLEY, BYLINE: Good morning, Steve.
INSKEEP: How much will this bank failure dominate the Fed meeting?
HORSLEY: It's definitely casting a shadow. It not only influences the Fed's decision about interest rates this week, but the Fed itself is under the microscope for the way its supervisors police Silicon Valley Bank and a second bank that collapsed a few days later. A House committee is planning to hold hearings on the subject next week. Here's committee Chairman Patrick McHenry of North Carolina on CBS.
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PATRICK MCHENRY: We need to get to the bottom of whether or not this is a supervisory problem, a regulatory problem, a bank mismanagement problem - perhaps all three.
HORSLEY: You know, in hindsight, the problems at Silicon Valley Bank are clear. It had really fast-growing deposits, most of which were not insured. It was overconcentrated in the tech industry, which meant a lot of withdrawals when that industry suffered a downturn, and too much of the bank's money was tied up in long-term bonds, which lost value as interest rates rose. So this was a recipe for trouble. And we now know many of those problems were identified by Fed supervisors years ago, but not corrected.
INSKEEP: Well, sure. It just sounds like math. You can tell that interest rates were going to be going up. You know you have a certain number of assets. And if you're smart, if it's your business, you ought to be able to do the math and see the problem coming. So who failed to get the word out?
HORSLEY: Yeah, Bloomberg, The New York Times, The Wall Street Journal all say the bank got multiple warnings about its risk management practices. The Journal says one notice came as far back as 2019. These notices are typically confidential, though. Rutgers economist Eugene White, who's written a lot about bank supervision, says the idea is to quietly correct the problem without damaging a bank's reputation.
EUGENE WHITE: What they don't want to give is a warning not only to the public, but to the financial community in general. And any change in the signal might panic people.
HORSLEY: Of course, panic is what ultimately ensued at Silicon Valley Bank. We had a massive bank run, and that's when the government had to step in.
INSKEEP: Help me with some context here. How unusual would it be for a bank to get a bunch of warnings from the Fed and not take action?
HORSLEY: Yeah, that's hard to know, but it's certainly something people are going to be asking about. We don't know how many other banks have gotten similar notices from Fed supervisors and what steps they've taken to address them. Right after a bank failure like this, there are lots of calls for increased monitoring, but often we hear calls for a lighter touch. Literally days before Silicon Valley Bank went under, Republican senators were complaining about too much bank regulation from the Fed. Dennis Kelleher, who heads the nonprofit watchdog Better Market, says that's no surprise.
DENNIS KELLEHER: The power and influence of the financial industry in Washington, D.C., is incredibly widespread and ever present. And the result is that they are pushing for deregulation at all times.
HORSLEY: We know that Silicon Valley Bank was spared some of the most stringent bank oversight thanks to a law passed in 2018. What we don't know yet is how that deregulatory atmosphere affected the quality of supervision the bank did get. We may learn more about that in the weeks to come. The Fed is planning to release an internal report by May 1.
INSKEEP: NPR's Scott Horsley, thanks so much.
HORSLEY: You're welcome.
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