Biden sidesteps banking turmoil as he calls on Congress to act

Justin Sink and Josh Wingrove, Bloomberg News on

Published in Political News

As the global banking crisis stretches into its third week, President Joe Biden has turned to a familiar playbook — lay low and point the finger at Congress.

Publicly, aides and top White House officials say lawmakers have a responsibility to intervene. Unprecedented executive actions are being discussed behind closed doors, but Biden’s spokespeople are refusing to detail those deliberations while warning of the legal and practical obstacles to unilateral moves.

Treasury Secretary Janet Yellen ruled out one dramatic option — the government offering blanket coverage to all uninsured deposits — in testimony on Capitol Hill on Wednesday. And Biden has for days avoided public appearances where he might be required to comment on the issue, hoping a schedule packed with Hollywood celebrities and travel will project calm.

All told, the approach — keeping Biden out of the limelight and putting the onus on lawmakers and regulators — is similar to how the administration is handling the negotiations on raising the debt ceiling, providing a dry run of the White House’s strategy before the next test of the financial system.

“We are going to do everything we can to use the tools that are given to us to make sure that the American people feel confident, and they should,” White House Press Secretary Karine Jean-Pierre said Tuesday. “But, again, we can’t let Congress off the hook, they have to take some actions as well.”

New approach


Biden’s public deference to regulators is a contrast from the opening days of the crisis, when the White House and Treasury Department worked feverishly to stem the fallout from the collapse of Silicon Valley Bank and Signature Bank, and evokes a strategy the administration believes will also prevail in the debt-ceiling fight.

Aides say Biden’s relative silence shouldn’t be confused for inattentiveness. The president has been briefed daily by chief of staff Jeff Zients and economic adviser Lael Brainard, both just weeks into their new positions.

Brainard met privately with JPMorgan Chase & Co. Chief Executive Jamie Dimon on Wednesday at the Financial Services Forum, where executives are discussing how to shore up beleaguered banks.

Taking that work behind closed doors is rooted in an effort to avoid sparking market fears and in limiting expectations for Biden to act in other crises. There’s an auxiliary benefit: while Yellen and Federal Reserve Chairman Jerome Powell’s words have moved markets and drawn scrutiny throughout the crisis, the president has remained largely unscathed.


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