The beating death of Tyre Nichols has renewed calls for reforming the police. But can anything really change?
Guest Host: Indira Lakshmanan
The Senate scrambles to save the Patriot Act as negotiations continue. The Justice Department says the NSA will begin winding down bulk collection of Americans’ phone records if lawmakers do not act today. The Senate clears a hurdle to give President Obama fast-track authority on a Pacific Rim trade deal. Fox News puts in place new rules to limit the number of candidates who can participate in the first GOP debate. And what’s next in the release of Hillary Clinton’s emails. A panel of journalists joins guest host Indira Lakshmanan for analysis of the week’s top national news stories.
- Christina Bellantoni Editor-in-chief, Roll Call.
- Neil King, Jr. Global economics editor and deputy Washington bureau chief, The Wall Street Journal.
- Jeff Mason White House correspondent, Reuters.
Video: Why Were Officers Indicted In Freddie Gray's Death, But Not Others?
Video: What Can We Expect From The Latest Airbag Recall?
Some 34 million U.S. cars are affected by the latest airbag recall from Takata – an issue that will take anywhere from two to five years to fix.
Our panel took a look at what it will mean for consumers.
MS. INDIRA LAKSHMANANThanks for joining us. I'm Indira Lakshmanan of Bloomberg News, sitting in for Diane Rehm. She'll be back next week. The NSA's bulk data collection could come to an end with its fate hanging on a Senate vote today. An unprecedented airbag recall could take years to complete. Big banks plead guilty to massive currency manipulation and what to expect from Hillary Clinton's emails.
MS. INDIRA LAKSHMANANJoining me for the domestic hour of the Friday News Roundup, Neil KING JR. of The Wall Street Journal, Christina Bellantoni of Roll Call and Jeff Mason of Reuters. You can watch a live video stream of our conversation on our website, drshow.org. We'll be taking your questions and your comments throughout the hour. Call us on 800-433-8850. Send us an email at email@example.com or join us on Facebook or Twitter. Welcome everyone.
MR. NEIL KING JR.Good morning.
MS. CHRISTINA BELLANTONIHi there. Happy Friday.
MR. JEFF MASONHappy to be here.
LAKSHMANANHappy Friday is right. So Jeff, I want to start with you. The Senate is supposed to decide today whether to preserve the Patriot Act, the law that passed after the September 11th attacks that grants the government vast surveillance powers. So what's the latest?
MASONSo a lot of controversy over this particular issue is people will remember Edward Snowden was involved in revealing some of the details about what kind of data was or has been pulled together by the NSA, bulk phone data, that is very controversial about -- in terms of privacy, in terms of what people's information is being saved by the government.
MASONSo debate on both sides among Republicans and Democrats and particularly within the Republican Party about how much of that should be preserved and that's being debated today in the Senate.
LAKSHMANANSo is Majority Leader Mitch McConnell gonna keep his colleagues working through the weekend on this?
MASONIt certainly looks like that's possible. We were just talking before the show started about the police needing to have -- do a little bit more overtime because of both the Congress staying in session, but also Memorial Day weekend activities. So yes, it looks like it may be a long few hours.
LAKSHMANANWow. Okay. He's gonna keep them working hard. Christina?
BELLANTONII will say that nothing motivates senators to get out of the way like the smell of jet fumes and a long weekend. The House has already gone home and senators are frustrated. Senator Rand Paul basically slowed down debate in what he likes to call a filibuster on this very issue and it illustrated this divide that Jeff's talking about that's not -- it's not really partisan.
BELLANTONIIt's this strange ideological divide. And you've got all of the Senate presidential contenders on different sides of this issue. Marco Rubio is siding with Mitch McConnell, basically saying we need to have the strongest protections as possible to prevent any terrorist attacks, anything like that. And then, you've got Ted Cruz who's standing with what the House passed overwhelmingly. There were only 88 no votes in the House to basically expand the USA Freedom Act, but not allow for the bulk collection of data.
BELLANTONIAnd then, you've got Rand Paul, you know, not only trying to lead this effort and get attention, but he's siding with some of the most liberal Democrats on this issue, saying we've gone too far. Privacy is a big concern here. And so it's a strange debate to watch when the nation has seen the Edward Snowden issue evolve and people really feeling as if their privacy is being violated.
LAKSHMANANUm-hum. Well, for once, to have Ted Cruz siding with the president is interesting 'cause the president has been urging the Senate to approve the House version of the bill. Is that possible?
BELLANTONIIt's possible. I don't know that we know how this is all gonna shake out. They're trying to cut a lot of deals. You know, just this morning, our CQ floor watchers are sending all of these different updates. Mitch McConnell is saying, look, you know, we'll try to allow as many amendments, we're gonna maybe consider how long these records are stored, is it six months, is it two years, the private companies, you know, the AT&Ts and the Verizons, do they have the power here or do we allow the government to have the power.
BELLANTONIAnd the big questions is whether they allow it to expire on June 1.
LAKSHMANANSo Neil, what happens if the Senate doesn't act? The Justice Department has said that the NSA will stop sweeping up our telephone metadata?
KING JR.I think it actually goes beyond that. The administration has been arguing that if they actually are forced to shut it down, they have to shut it down in ways that things go away and that all this data that they've accumulated would be wiped away. There was actually a briefing they gave during the week and it says, so the bottom line is -- this is one of the top administration officials -- is that anything other than the passage of the USA Freedom Act, which is the House bill, creates real uncertainty both operationally and legally for operators and for our national security professionals.
KING JR.So they're arguing that it would be disastrous really and without any real certainty about when it would be revived. We've seen so many weird moments this year so far of alliances between the White House and various portions of the Republican Party and I don't know if I can remember another time when the White House is saying, that bill that the House just passed, we love that bill.
BELLANTONIThat's the one.
KING JR.And Senate, you, you know, weird, goofy people in the Senate, you should pass that bill. And that's actually what's happened here. And if they don't pass, if the Senate doesn't go along with exactly what the House did, then they would be in the position of John Boehner having to say, hey, all 435 House people, you're gonna have to come back to town. We're gonna have to vote now to keep this alive, which would be complicated to say the least.
KING JR.I don't know whether it's likely to happen, but we'll talk about trade in a minute. But the amazing thing is that Mitch McConnell really, really wants to move forward on this huge trade bill today and at the same time, they're having a huge debate over the whole NSA privacy issue, which is equally as complicated and equally fraught in many ways.
MASONAnd the deadline part is key. They did say -- tell lawmakers this week that if they don't make a decision by today -- not by the end of this month, but by today, then the NSA will have to start shutting down the program. Otherwise, it could be out of compliance on June 1.
BELLANTONIAnd so there's this middle step where they might vote for, let's say, a month-long extension or a two month long extension. And we've seen how successful those are in both the House and the Senate. I mean, it's just been sort of a mess, where you're governing by pulling it out. And think about how these votes could be used in both a presidential election, but also for vulnerable senators in the 2016 congressional elections because if you don't vote to extend it, you know, are you gonna be called somebody who's weak on national security and that puts Democrats in a bind.
LAKSHMANANRight. So everyone's worried about what their record is gonna look like.
KING JR.Yeah, and Chris Christie, I think it was on CNN this morning, said something about who cares about privacy if they're in a coffin, which I saw Mike Lee then saying that was equivalent of political pornography to talk like that. But here, he's saying, this is so important that if we don't preserve it, we're all gonna die and then people on the other side saying, come on, you know, particularly on the Rand Paul side saying, our privacy issues are much more important to us than whatever we gain on that front.
LAKSHMANANOkay. Jeff, President Obama this week has banned the transfer of military equipment to local police forces. Why?
MASONEveryone probably remembers the image in Ferguson, Missouri, after an unarmed black man, Michael Brown, was killed there and that lead to protests and riots where the police came out in riot gear and heavy machinery, weaponry. And it just -- the imagery was very, very stark and, of course, this whole discussion has been advanced by other shootings across the country.
MASONAnd basically, the president decided, and the White House decided, this week to say, local police departments do not need tanks. Local police departments do not need big artillery from the military, from the Pentagon and they're banning the Pentagon and other federal agencies from sharing that with local police departments.
LAKSHMANANSo it's about optics, but it's also about rebuilding trust with local residents for these police forces.
MASONIt absolutely is. And it's a reaction to that particular incident, but it's also just sort of looking specifically at what do police need? What do police need to rebuild this trust? They don't need those big weapons. They need to build better relationships with their communities.
BELLANTONIWhat wasn't clear to me about this and maybe you guys know the answer, what happens to the police forces that already have all of this. Like, do they need to get rid of it? Do they need to auction it off, you know, for charity? Like, how does that all wind down?
KING JR.You know, this whole thing got to be -- so it was originally begun as, like, a we need to have well-fortified, some SWAT teams in certain important parts of the country in case there's some extremist group or al-Qaida happening of some kind. And then, it became, particularly as the military fought all these wars in various places, they had all this surplus material that they were giving to police departments.
KING JR.So I think it was the New York Times did a great piece that showed all the crazy stuff that's ended up in, like, outposts in Wyoming in so like the, you know, Laramie police department has a tank or whatever, all this crazy stuff that's been out there. So what it amounts to is it's banning the giving to police departments of track vehicles, tanks, guns and ammunition over 50 caliber, bayonets and grenade launchers.
KING JR.Yeah, grenade launchers.
LAKSHMANANI cannot imagine Laramie, Wyoming needing a tank. What kind of an action is going to take place...
KING JR.Well, I don't know. I made that up, but it's like that, right? It's that -- what it hasn't banned is -- and this is a loophole that's out there, is that a lot of these police departments have also used DHS grants from the Homeland Security Department to buy some of these things. And as long as they find the money somehow, they still will be able to buy these surplus things.
LAKSHMANANSo it's only banning the giving away. It's not actually banning the acquisition.
LAKSHMANANChristina, how are the police department reacting to the president's order?
BELLANTONIThat, I'm actually not that familiar with. But Congress is, in some ways, breathing a sigh of relief, right? 'Cause they were sort of starting to look at this issue when Democrats were still in charge of the Senate. You saw a lot of hearings on demilitarization of police, but they have not wanted to really touch it. It is not a popular thing for them to really approach. And, you know, given what happened in Baltimore and the debate sort of got revived after the riots there. And so Congress has been like, uh-oh, are we gonna have to deal with this again?
BELLANTONIAnd so they said, okay, good. The president has done something. We can at least point to that and hopefully, we're not gonna have to address this again.
MASONAnd it's interesting how big of an issue it's becoming for the president in the waning days in the last year and a half of his presidency. When he unveiled this earlier this week, he talked about not only these new restrictions on weaponry, but having a broader shift in how law enforcement treats its communities and works with people that it is serving.
MASONAnd that, I think, is gonna be, particularly under Loretta Lynch as well, a really big issue.
LAKSHMANANWe're gonna take a short break. I look forward to hearing your questions and your comments on police tactics and equipment and lots of other issues we're talking about today. Stay with us.
LAKSHMANANWelcome back. I'm Indira Lakshmanan sitting in for Diane Rehm. We're talking today with Neil KING JR., global economics editor and deputy Washington bureau chief of The Wall Street Journal, Christina Bellantoni, editor-in-chief of Roll Call, Jeff Mason, White House correspondent for Reuters. So before the break we were talking about President Obama's decision to stop the free transfer from the federal government of military equipment to local police forces. Neil, the Fraternal Order of Police came out with a statement reacting to this. What's your sense of how the police have reacted in general?
KING JR.Well, there's been a fair bit of tension between various police departments and the National Organizations of Police basically accusing the president of having intervened and deciding to use his very loud podium basically to critique or to weigh-in on some of these things that are extremely local. And their argument is that he's been too quick to side with the victim, too easy to sort of overlook the intense pressures that the police departments live under in these places where the crime rate is extremely high and where the tensions between the community and the police forces are very delicate.
KING JR.And so there's a fair bit of bad blood. And he went up to Camden, is what Jeff was referring to, earlier this week to make this announcement, which is a place where they were trying to highlight that the relations between police and community have actually improved a lot and they were highlighting that as an example. But a lot of the police organizations use that as a moment to also say, but wait, Mr. President, you've also been a little too quick to judge us.
LAKSHMANANMm-hmm. And Jeff, I mean this whole debate over the use of police force is happening at the same time that a grand jury in Baltimore has actually indicted six officers in the death of Freddie Gray. We have seen in the last year that grand juries elsewhere have not indicted police officers when black men who had not committed any major crime were killed by the cops. What makes this time different?
MASONI think these stories are getting a lot more attention. It's hard to say what's different. I think some people will ask, why did my son or daughter not get the same kind of attention when this same exact thing happened a year ago or two or three. But certainly in the last months and years they are getting a lot more attention. It's gone up to the plate of the president. And I think he would say, in response to some of the criticisms from the police, that, you know, every time he does make a comment or weigh-in on something like this, he also mentions very specifically that most cops are terrific and understands the pressures that they face.
MASONBut, you know, the evidence, the statistics and not just the anecdotal evidence that we've seen with stories like the ones in Baltimore and elsewhere show that it's a real problem. And it's one that he takes seriously because he's the commander-in-chief but also because he's the first black president.
BELLANTONIAnd the president has very strongly condemned any violence against police in retaliation for that. I mean, you have seen this just tragic thing unfold over the last year really, starting with Ferguson, New York, Baltimore. And so, you know, that's one of the first things he'll always say whenever he gets a statement about it.
LAKSHMANANMm-hmm. Mm-hmm. All right, Neil, back to Capitol Hill. The Senate has cleared a hurdle for President Obama to have fast-track authority on Pacific-Rim Trade Deal but we are not there yet. So why is this so controversial and why is it so important to the president?
KING JR.Well, it's hugely important to the president and in a lot of ways to the country because it is -- it would be the biggest, most comprehensive trade deal the U.S. has ever done, 12 countries in all spanning the Pacific, Japan, most importantly, Canada, Mexico, which we already have a deal with, but a whole slew of countries and 40 percent of the economy, global economy is accounted for by these countries. And a setback, if it were not to go through, would be pretty large for just U.S. prestige overall.
KING JR.So, the complexity on the Hill -- there's so many strands of it, it's almost hard to know where to start. I mean it's amazing that, on the Democratic side, support for trade has basically collapsed. I mean you have 185 House Democrats, if my math is right. At the moment, I think the House is expecting that they might get support from maybe 15 when this comes -- push comes to shove. Last time around, when President Bush, George W. Bush sought it in 2002, he got 27 House Democrats to support him. So that's been a big drop.
KING JR.And then there's just a huge amount of distrust among Republicans saying, do we really want to give this president more authority? The thing that they're actually voting on is called Trade Promotion Authority. And they're saying, hmm, of all guys that we don't want to give more authority to, to do big, sweeping international things that we don't understand very much, it's not Barack Obama. And there are all sorts of other things that we could unravel but -- so we're expect -- it's expected to get through the Senate, which it had been all along. It could be really tight. It may spill into tomorrow. Then the big thing is will it get to the House.
LAKSHMANANTomorrow meaning Saturday.
KING JR.Yeah, yeah. Exactly.
BELLANTONIOkay. So again, a short weekend for the Senate.
LAKSHMANANYeah. Well, Christina, what has the reaction been from progressive Democrats and labor groups over all of this?
BELLANTONIThey're furious. And there's a lot of people who feel the president is letting them down on this issue. They have been campaigning against it for a very long time, spending a lot of money and advocacy, you know, getting out there on Capitol Hill every day. But this is an area where the Republicans, when they were able to win control of the Senate last fall and people started looking to an all-Republican Congress, where are areas of compromise? And this was the number one thing on the list. You've seen Paul Ryan put his neck out there on the line for this. You know, another thing where Ted Cruz and the president agree on is this issue.
BELLANTONIAnd the Republicans, I think, are making a political balance. Do they want to give the president that they say, you know, shouldn't have any power at all and they're suing him for other items and they're waiting for what's going to happen with the Affordable Care Act at the Supreme Court, do they give him this authority...
BELLANTONI...and sort of look at a compromise with him? Or do they, you know, say, no, we're going to say he's not the right guy. And I think that they're politically calculating that they'd rather see the Democrats mad within their own party, particularly with the presidential race out there and Hillary Clinton under increasing pressure to have to take a side and talk about this.
LAKSHMANANTo weaken them from within. Mm-hmm.
BELLANTONIYou know, the 2008 presidential race, and they fought about NAFTA, even though neither of them had anything to do with it in the Democratic Presidential Primary. You know Hillary Clinton was very much on the sidelines and was not in favor of it when her husband...
BELLANTONI...you know, pushed it through as president. So this is going to be something that continues to divide the Democrats. If it passes, they're going to continue to debate it. And as this gets uglier and uglier on Capitol Hill, I think that that small vote in the House is going to be the real problem for the Republicans.
LAKSHMANANWell your point about Democrats and what the base thinks about this in 2016 is really relevant. We have an email from Diane in New York City who says, "It would be difficult to adequately state the sense of disappointment and betrayal that many of us feel concerning the president's fast-track efforts on TPP. As a former fervent supporter and twice voter, it's astounding that this so-called populace president is now in the thrall to big business and corporations. So, Jeff, that's a pretty damning indictment.
MASONThe White House absolutely rejects that criticism.
MASONThe president has taken it quite personally as well. I mean, you saw him, he gave a press conference at Camp David last week that I was at where he was asked again about this trade agreement and asked, in particular, about the sort of division between him and Senator Elizabeth Warren, who is a leader of the progressives and a bit of a thorn in the side of both the administration and of the Hillary Clinton campaign. And the president just, again, described the two of them as a friend, made a point of referring to her again by her first name, which he'd been criticized for doing, and said over and over again, look, you guys, I'm one of you. I am a progressive.
MASONAnd what I'm suggesting is actually good for the country, good for jobs. I wouldn't sign up to it if it didn't have the protections on the environment and on labor standards that you all are worried about. But it is absolutely not something that progressives are buying and that's hurting.
BELLANTONIBut, you know, with those lines in that email, I mean, this person has probably gathered that from this sort of grassroots opposition that the labor unions have been very successful in spreading that message.
BELLANTONII've had so many people tell me, I'm so against this, I'm so mad at the president. But they don't really understand like the particulars in the deal. And I'm not a trade reporter. I'm not sure I could explain it for half an hour either. But they're opposed to it because they've been sort of conditioned.
BELLANTONIAnd seeing it, especially in like their own networks, you know, on Facebook. There's a lot of opposition out there. That's where the labor unions have been successful. They're not going to be successful, I think, in the ultimate legislation.
LAKSHMANANSo spread the message, it's bad for jobs, bad for the environment, bad for conditions. Neil, what is your sense of what is ultimately going to happen on the other side of this? Does this bill have support in the House?
KING JR.John Boehner is in this position where he will have to muster very large support among his Republican caucus to make up for the math where, if they're lucky, the White House, for all of the lobbying that they've been doing, and this is probably the most muscular -- certainly the most muscular lobbying they've had to do during this whole time of their own members, they'll be lucky to get 20. John Boehner will have to make up the rest. My prediction is that they will, like these things tend to happen, they'll barely squeeze it out and they'll -- it'll pass by probably a vote.
KING JR.Which is the way these things go. But it is striking. You look at a state like California, which is of course very Democratic, particularly along the Coast. You look at even the City of San Francisco, which is a place that, if you want to pick a place that's benefited from globalization and where rents and everything else are soaring and it's very hard to see the soft spot there -- you have a representative, Nancy Pelosi, who happens to be the minority leader, who's extremely ambivalent on this, which more shows that there's this sort of ideological current among the Democratic caucus -- it's extremely strong, very frustrating to Barack Obama, but not in this case is really particularly representative of the base of the people who live in that place.
KING JR.This would even apply to parts of Silicon Valley. I mean, if there is a place that's going to benefit from TPP, I think that would be one of them.
KING JR.But, again, there's -- if the unions strengthen just the liberal unease about what this might mean is very strong.
LAKSHMANANWell regardless of the liberal unease, it sounds like it's probably going to scrape through the Senate, then meet an uncertain fate in the House but you think ultimately make it through by a hair.
KING JR.Yeah, I think so. Boehner's talking about bringing it up in the next couple of weeks, after the recess. So we'll see. It'll be a fun June.
BELLANTONII will say it has really highlighted not just Elizabeth Warren's place nationally but she can really influence the debate in Congress. And as, I think now it's died down a little bit of, is she going to run for president? She's not going to run for president. But it does demonstrate that if she stays in Congress, she can actually be an influential voice in this debate, even in the minority party. You know, she is allowing this conversation to be shaped. And, you know, I've also said, she's very popular among Democrats. Is it really terrible to have a popular figure in Congress, since they're the most reviled institution in the country right now?
BELLANTONISo, in the end, that could be good for a robust debate.
LAKSHMANANOkay. Jeff, this week we saw a huge recall of airbags made by the Japanese manufacturer, Takata. And this is going to affect 34 million cars. Why is this happening?
MASONYeah, it's a lot. The Japanese company, Takata, as you mentioned is one of the largest suppliers of airbags in the world. And after a long time of denying any sort of problems with their product, they finally admitted that they were defective and doubled the number of vehicles for recall in the United States to 34 million. That's one in seven of more than 250 million cars on U.S. roads.
MASONSo it's a lot. Basically, the airbags have -- they're connected to six deaths, more than 100 injuries. They can explode violently when they deploy, sending shrapnel out. And Transportation Secretary Anthony Foxx said that up until now, this is his direct quote, "Up until now, Takata has refused to acknowledge that their airbags are defective. That changes today." And it changes in a massive way that affects a lot of consumers and a lot of car companies, which are saying it could take several years for all of these airbags to be replaced and for these cars to be recalled. So it's a big deal.
LAKSHMANANHmm. So, Neil, which cars are affected and what are vehicle owners supposed to do now?
KING JR.If only I knew. I don't think anybody actually really knows.
BELLANTONIGet out your Google.
KING JR.It's -- there are 15 -- they think, at the moment, there are 15 different brands. It's very heavy on Toyota and Honda...
KING JR....which wouldn't be surprising, and up to 60 different models. The last I saw, they were expected to come out in coming days with something that would be an exhaustive list. But it's a -- it's really complicated. This goes back 15 years or more. So there are cars from the early 2000s that would have these airbags in them.
KING JR.And because of -- it's also going to be difficult, of course, just because people buy and sell cars among themselves. But in terms of what the supply chain is for which particular models of which particular cars these bags went into is going to take some time to sort out. And it's already causing a lot of nervousness among people that are wondering if they're driving one of these cars.
LAKSHMANANMm-hmm. I think the NHTSA has a website that people can look up and see if their car is on it.
BELLANTONIBefore walking in here, there was a story that had been out like in the last two hours that Mazda, Mitsubishi and Subaru have now joined this. Toyota is one of the heaviest expected. But I was realizing, you know, I drive a Honda. Like, oh, I guess I'll get something in the mail if I need to do something here. But it is -- for me, it's interesting with what GM went through last year, right? Like, from a company perspective, like how do rehabilitate your image? And they still are trying to get out from underground because it's been such an ugly process for them.
LAKSHMANANAnd how long is it going to take to replace all of these airbags?
BELLANTONIRight. I mean, it could be another...
KING JR.I think they're saying five years or something like that. $2 billion they're saying it might be.
LAKSHMANANIncredible, 33 million inflators needed to do this.
MASONYeah, I mean, and the White house even yesterday weighted in and urged people to go to that website, double check whether or not your vehicle is affected. Because, as we were saying when we were talking about how many are involved here, it's a lot.
LAKSHMANANYeah, well a lot of advocates are saying that consumers should be given rental cars or loaner cars in the interim to make up for this, because it's going to be a huge inconvenience for millions and millions of people. Neil, a huge victory this week for supporters of the minimum wage and the Fight for 15 campaign. Tell us what happened in Los Angeles.
KING JR.Well, this has been percolating for a while. The City Council -- it's still not final, it has to go through another step -- but voted overwhelmingly in favor for raising the minimum wage from $9 an hour in Los Angeles to $15 an hour by 2020. So that's a 65 percent increase, something like that, happening at a time when wages, particularly at the low end of the wage scale, which this would obviously apply to, are growing at like 2 percent a year if you're lucky, and at a time when there's been a big national minimum wage debate that's pretty much going nowhere in Congress.
LAKSHMANANI'm Indira Lakshmanan and you're listening to "The Diane Rehm Show." If you'd like to join us, call 1-800-433-8850. Send us an email to firstname.lastname@example.org or follow us on Facebook and send us a Tweet. Don't forget, you can see all of our guests live right now on a video stream at drshow.org. So, you know, continuing on that minimum wage fight, Christina, it strikes me that a few years ago a $15 minimum wage would have sounded completely preposterous, not possible to get, even from the advocates. So how did we get here to this point?
BELLANTONIWell, and I mean I think it's important to point out that it's going to take a number of years before it actually is fully in effect. And more than half of the Los Angeles population earns the minimum wage right now. That's a huge number. And I think, personally, as a California native, I will say California has led the way on many things. And you've seen big cities taking the lead on efforts like this because people can't afford to live where they are working. And the president tried to make this a big initiative. You know, he's done some efforts, particularly with federal contractors. And in sort of a step back has said, look, like I think private industry will end up leading the way.
BELLANTONIWe've seen McDonald's, Wal-Mart, other companies at least trying to raise it a little bit. But you've heard during the 2014 Congressional elections that a lot of lawmakers were saying they support efforts at the state level to, you know, raise them or put things on the ballot. And that might be where the future is because a federal minimum wage increase is not going to happen.
LAKSHMANANWell, Jeff, are we going to see other cities following suit?
MASONWell, I think that's probably -- I think there probably will be. And other cities have already done this, like Chicago, San Francisco, Seattle. And I think it's interesting to look at the politics of it. The president has made raising the minimum wage a key issue the last few years. And I think critics and jaded reporters have thought, you know, why is he doing this? This isn't going to happen. You're definitely not going to get a federal minimum wage passed. But what is happening is, the cities and specific companies, Wal-Mart, Facebook, others, are taking moves because of...
LAKSHMANANTaking it up locally.
MASONTaking it up locally and taking it up themselves because of the pressure, as Christina mentioned, for there to be a living wage.
BELLANTONIAnd L.A. could be a tipping point, given the size of the city. Maybe New York City in the not-too-distant future.
KING JR.I was going to say, it's -- in Washington, it's thought to come up next. But what's interesting is this actually kind of goes to this conservative argument in a way, which is, let's not do it federal. Let's let the localities live by their own economic logic and have the wages reflect what the dynamic of that marketplace is. So this may not be what they like but it definitely reflects that sort of philosophy.
LAKSHMANANWe're going to take a short break now. And when we're back, we're going to go to your calls and your questions. Stay tuned to "The Diane Rehm Show."
LAKSHMANANWelcome back. I'm Indira Lakshmanan, sitting in for Diane Rehm. Today, we're talking with Jeff Mason, White House Correspondent for Reuters. Christina Bellantoni, Editor in Chief of Roll Call and Neil KING JR., Global Economics Editor at the Wall Street Journal. Neil, we have got to go now to one of the really most interesting stories of the week, I think, that hasn't gotten a lot of attention. Four giant global banks agreed to pay five billion dollars in fines to the US government. Which banks, and why are they paying out?
KING JR.It's actually really rather extraordinary where if you just look at the US side of this equation, you have J.P. Morgan Chase and Citigroup, the first and third largest banks in the country, having agreed to felonies, basically. So, two of the biggest -- the three biggest banks in the country, now, essentially, convicted felons. Large, very, very large fines. J.P. Morgan Chase over -- is about 1.3 billion dollars in fines. The allegations against four of the banks, I think there were five altogether, weren't there? Yeah, it was four banks that were involved in allegations of that they manipulated currency rates, basically.
LAKSHMANANAnd then there was also UBS.
KING JR.And then UBS was also...
LAKSHMANANWhich didn't -- right. Which plead guilty and so therefore, they got off.
LAKSHMANANThey didn't have to pay.
KING JR.The UBS, which has been slapped for a whole bunch of other things over the last couple of years, was involved in the accusation there was that they had manipulated the LIBOR rate, which is the rate for interbank loans and it's easily a miniscule thing. All of this stuff, because the money that moves is so vast, if you can fix just tiny fractions of a percent to your advantage when you're doing Euro to dollar exchanges or whatever, you can make a lot of money doing that.
KING JR.And the allegations for the other four banks, Royal Bank of Scotland, Citigroup, JP Morgan and Barkley's was that these traders that had basically set up a sort of chat room which they called, oddly enough, the cartel, and for years they were texting one another in this sort of chat room. They would come to agreements that they would either intervene in ways that would shift the exchange rate in ways that was predictable, that they could make money off of, or they would assure some period of calm where somebody could then complete some sort of deal that would be profitable to them.
KING JR.The thing that shocked a lot of people was not just the size of these crimes, not the size of the crimes, the size of the fines, but how little reaction there's been in the market. The stock prices didn't go down at all for any of these. And the fact that no individual was charged. So, you have people like Elizabeth Warren and others saying, wait, so these banks committed felonies, but there are no felons?
LAKSHMANANAnd the market didn't even react, as you said. I mean, Christina, essentially we're talking about a crime of conspiring to fix rates and completely manipulate the market. And the sheer scale of this kind of price fixing is really hard to comprehend, and yet it is so rare for a big financial institution to be found guilty of criminal behavior.
BELLANTONII mean, I think part of it was it seemed like they were cooperating with, you know, admitting wrongdoing. But one thing, this is a 3.4 trillion dollar market, right, between all of the different currencies across the globe. Globalization has made this an even larger issue, you know, over the last 50, 60 years. And I didn't quite understand it. My husband's Australian and he had a business in the UK where he was living and now I get it, right? Like, if he tries to transfer money here to the US, so, you know, we can pay off our second mortgage on our house, he has to do it at a certain time of day, because that's when the rates are fixed.
BELLANTONISo, like this actually, I can completely understand why even the slightest percentage makes a huge difference for a lot of people.
LAKSHMANANAnd yet, the last US bank that I can think of convicted of a comparable felony was Drexel Burnham Lambert in the late 80s, right Neil? I mean, that, many people don't even remember about that bank, and yet we've seen so much going on on Wall Street since with, you know, the mortgage, the mortgage issue. And yet, this is the first thing that happens. I wonder whether some of that is blowback from people not being punished, banks not being punished for what happened in 2008.
KING JR.Well, there have been a series of various penalties. This one stands out because of the basically copping to a felony charge. But over the past two years, it's been about 60 billion dollars in penalties that have come on to the various banks from a whole variety of sources, not just the Justice Department, the Federal Reserve, there have been Attorney Generals in various states that have gone after the banks for different practices. This is, I guess, as much as anything, an example that if you're close to the money, it's easy to make money by siphoning ever tiny fractions off that money and the, you know, the criminal possibilities are obviously large.
KING JR.And the fact that they stumbled, in a way, upon this, you know, obscure chat room where this all was going on was pretty remarkable. It also would give you the indication that there's probably need for more vigilance.
LAKSHMANANThere's a lot more going on, probably, that we don't know about. You can see all of our guests on our live video stream at drshow.org. And if you want to call us, it's 800-433-8850. You can also send us a message, an email, a tweet. You can get us on Facebook. So, Jeff, the State Department is expected to release emails written by Hillary Clinton during her time as Secretary of State. When are we going to see this first batch?
MASONYeah, that's a good question. Probably soon. A judge ruled that the State Department needs to roll out these 55,000 pages of emails over a consistent period, as opposed -- I guess the State Department had said it might take them until January to get them all ready and this judge said he wants them to be rolled -- released on a gradual basis. And the Secretary, former Secretary of State, Hillary Clinton, spoke unusually to reporters this week. And repeated again that she wants them out as soon as possible.
MASONSo, there's a lot of pressure on the State Department, both from the now Presidential candidate Hillary Clinton, as well as from the courts to get these things out.
LAKSHMANANWell, she wants them out, and somehow, the New York Times managed to get a third of this first batch of emails in advance. So Christina, did they find any smoking gun or any new evidence about Benghazi?
BELLANTONIThis is my exciting, bookmarked weekend reading, actually. Because I have not gone through them yet, but if you're going to release emails, probably the Friday of Memorial Day Weekend is a pretty good time to do it. Nobody's paying attention.
MASONThat's called a Friday news dump.
BELLANTONILook, the House Republicans, particularly the ones that believe that there is a smoking gun on the Benghazi attacks of 2011 are going to go through these word by word by word. And no doubt, there will be something that they can use in a campaign against her. But, this is someone who has been in public life and has been subjected to having little privacy as a government -- whether that's official or outside of the official stature, for a very long time. Like, the chances that they're going to find something really extraordinary, I'd wager, are pretty low.
BELLANTONIBut that doesn't mean, you know, they're not going to parse every single word.
MASONAnd keep in mind, as well, that Hillary Clinton, and or her people have perused every single one of these emails. It was the former Secretary of State who decided which emails to turn over to the State Department.
LAKSHMANANTo give to the State Department in the first place.
MASONRight. So, and she, as we just said, is actively asking for these things to be released. They know exactly what's in there.
LAKSHMANANSo, unlikely to be any surprises. Neil, it means that we could be seeing this first batch very soon. Maybe even today, some people have suggested. When will the rest of all these emails be made public?
KING JR.Well, there was talk that it would might be as late as early 2016 before we would see all of them. It sounds as if it's...
LAKSHMANANBut then a federal judge rejected that plan, right?
KING JR.Right. I mean, I think we're just going to see a year where various of these things are dribbling out or pouring out in various batches. I mean, the thing that's so striking about all of this is you have a woman who launched her presidential campaign, just recently. She's been, now, trying to run a political campaign for president, which is, campaigns are about now and about the future. Everything that she's had to deal with is about the past. And it's going to be the biggest burden for her.
KING JR.I mean, she's had to talk about, or, you know, there was all the revelation about -- it wasn't revelation, they just disclosed how much money they've made in all their past speeches, her and her husband. 25 million dollars over the last 16 months or whatever it's been. The whole thing with Sydney Blumenthal who's a, you know, a past aid to her that was rejected, essentially, as someone that she might have brought into the State Department, but that the White House didn't want. He had been advising her sort of surreptitiously through emails about Benghazi and other things.
KING JR.All of the emails which were going to be -- so, it's all this baggage that she's gonna be carrying that's all about things that she did months ago, years ago and...
LAKSHMANANBut it was always gonna be that way, for Hillary Clinton to run for President, it was always going to happen.
BELLANTONIShe is likely to testify too, before the special committee on Benghazi.
BELLANTONIYou know, before the House in July. And that's...
LAKSHMANANPerhaps the only Presidential candidate who's gonna be testifying.
BELLANTONIShe has already agreed, you know, spoken to this many times, you know, on Capitol Hill, but this will be kind of the big show. And don't forget, they delayed this committee's work in part to push it as close to the 2016 election as they could.
LAKSHMANANFor an October surprise or something akin to that.
MASONInteresting, though, about that testimony, that Democrats are actually not worried about Hillary Clinton's potential performance. In fact, polling shows that they're more excited that Republicans may overplay their hand in that type of a hearing. Which could, in the end, be helpful to her.
BELLANTONIShe's quite experienced on these kinds of matters.
LAKSHMANANYeah, she is. And Jeff, you said that she was talking to the national press in Iowa for the first time in about a month as the controversial or the Clinton Foundation.
MASONFirst time in about a month. I think she took about half a dozen questions. She addressed issues, which Neil sort of referred to as well about her foundation. She said the Bill, Hillary, and Chelsea Clinton Foundation, she said she's proud of it. She let the American people decide about some of the funding controversies. She was asked about Iraq and repeated her line that she's said for some time now, that her vote to approve the invasion of Iraq was a mistake, plain and simple. About the income that Neil was referring to that they've made, she said Bill and I have been blessed, but we haven't forgotten where we come from.
MASONShe addressed the Sydney Blumenthal issue and said, you know, I have a lot of friends and I'm going to continue to take advice from my friends.
BELLANTONIWith a loud belly laugh at the end of that question. Yeah.
MASONRight. Which is her signature, indeed. And then on the email issue, which we've already discussed, she repeated again that she wants them out as soon as possible.
LAKSHMANANAll right, let's go to the phones. We have a call from Phillip in Ocala, Florida. Phillip, you're on the air. Go ahead.
PHILLIPOh, I just woke up after holding.
LAKSHMANANWell, we're waiting for you here. Please proceed.
PHILLIPAlrighty. On your first subject, the NSA, I am amazed at the naivete of the Congress and the news media. I had a top secret clearance when I was in the service, which was the early 70s, before social media and all that stuff. And even if the NSA gets voted down, why do you think the CIA internationally, the FBI domestically, the OSI, NCIS, ICE and all these other people who have been monitoring phone calls either will stop.
PHILLIPThis is national security. I was in the service during, quote, the Cold War. A different time, a different place, but it was just as important.
LAKSHMANANAll right. So we have Phillip saying -- thank you, Phillip. We have Phillip saying that basically, you're naïve if you think the Patriot Act debate makes any difference, because the NSA is going to go right on ahead doing whatever it wants to.
BELLANTONIOr there will be some way around it, right? An emergency order or some other agency that's collecting it. I think Americans want, especially when you look at polling, there's now a basic assumption that your information is being tabulated, collected, read, eavesdropped on, right? It's become almost a pop culture joke to have this understanding now. And that's such a shift over the last 15 years. And I think people are fed up with it, but it's also something they can really understand, right? People know if they are sending emails and if somebody is reading those emails or collecting them based on whatever dealings they're having with anybody, that makes people uncomfortable in a lot of cases.
KING JR.But that shift is also, of course, coming back during a time, 15 years or so, where people have decided to disclose everything about themselves in real time all the time on Facebook, Twitter, everything else. I mean, the degree of transparency to which people now are willing to live and -- is so high that I think people have kind of shifted their presumption of privacy or how much they assume that they're going to be having anyway. But I was a little unclear as to whether he was getting to that, that we should assume that we're being spied on.
KING JR.Or whether there's a continued need to be doing it. I mean, the difficulty, of course, since the Cold War, is that we now have this sort of threat of people within the United States that might even have US citizenship, but have aims or motives that are, you know, somehow scary -- the whole kind of like people returning from possible service in Syria that might have something. I mean, that's a lot of the stuff that they're now trying to go after, basically.
BELLANTONIAnd with the internet being a huge part of the recruiting tool for groups like ISIS.
MASONWell, and that's part of the political debate as well. You've got some people pressing for privacy, but others saying, look, this is a time when ISIS is really a threat in the Middle East and potentially a threat to the United States. This shouldn't be a time when we're letting down our guard, in terms of some of our biggest tools.
LAKSHMANANI'm Indira Lakshmanan and you're listening to The Diane Rehm Show. Neil, we got an email here from Peggy, who's saying, I think your panelists are wrong when they say progressives oppose the trade pact with the Pacific because they don't understand it. I think the progressives are opposed because they witnessed what happened to our country under NAFTA. And this is Peggy from New Hampshire. Can you take that?
KING JR.Yeah. I mean, it's fascinating that Peggy would mention NAFTA, because NAFTA has been so much the focus. But again, I wouldn't be accusing people of not understanding it. It's an extremely complicated dynamic to understand, because basically, NAFTA came about in 1993, which also happens to be, and it was the first time the US had done a trade deal with a markedly less, you know, well off country. With a substantially lower wage base. So people look at NAFTA as being the force that sort of gutted US manufacturing.
KING JR.What they don't really note is that yes, our exports to Mexico, or sorry, US imports from Mexico have skyrocketed since then, but our exports to Mexico have gone up significantly in the meantime. Our overall trade relationship with Mexico has increased markedly. What people don't really notice or note all that much is that the most significant factor was not a trade agreement, but the fact that China entered the WTO in the late 90s, early 2000s. We granted them what we call PNTR, most favored nation status, which was sort of a given that that would happen.
KING JR.That's been much more the imbalancing factor. We're talking about huge globalization forces, way more than we're talking about the impact of actual, particular trade deals.
LAKSHMANANOkay. Jeff. We would be remiss if we did not bring up Fox News.
LAKSHMANANWho is going to host the first GOP Presidential primary debate and they say only 10 of the many, many candidates we know of already will be allowed to participate. So, who's gonna make the cut, and how much does that even matter?
MASONWell, it might be easier to say who won't make the cut. The criteria that Fox has set is that they -- that the candidates who appear on stage will need to be in the top 10 of the average of the five most recent polls. So, that could leave out -- there's about 18 candidates or potential candidates right now for the Republican field. That would probably leave out, at least according to polling now, people like Senator Lindsay Graham, Louisiana Governor Bobby Jindal, Senator Rick Santorum and former Hewlett Packard CEO Carly Fiorina.
MASONAnd those candidates will obviously object to criteria like that, because it is exactly those debates that give them a chance to raise their profile, when perhaps they've had a hard time. But the Republicans, on the other hand, don't want to see 18 people on the stage.
BELLANTONIIt's hard to get a substantive debate with that many people. I will point out two things. Rick Santorum, the second place finisher in the last presidential primary.
BELLANTONIAnd, you know, having him shut off stage, I think, does a disservice to people. And then the other thing is Carly Fiorina, for example, has said I will meet that challenge. Well, how do you meet that challenge? You know how? With spending money. Right? If she spends enough money on ads, she might be able to get her profile raised just enough, and then, that's inserting even more money into the system, which generally people say they don't like having it so much in the system.
LAKSHMANANChristina, we have just 30 seconds on this, but earlier this week, Jeb Bush said, those who have a problem with his name need to get over it. Tell us about that.
BELLANTONII, you know, the dynasty question is amusing, and I think that if it's Bush verses Clinton again, you're going to hear a lot of complaining in the media about this. American voters don't seem to have as much of a problem as people that are within like the political professional class.
LAKSHMANANChristina Bellantoni, Editor in Chief of Roll Call, Neil King Jr., Global Economics Editor at the Wall Street Journal, and excuse me, and Jeff Mason, White House Correspondent of Reuters. And I'm Indira Lakshmanan of Bloomberg News, sitting in Diane Rehm. Thank you all so much for listening.
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