On this “Face the Nation” broadcast, moderated by Margaret Brennan:
- Treasury Secretary Janet Yellen
- Rep. Ro Khanna, Democrat of California
- Rep. Michael McCaul, Republican of Texas
- Christopher Krebs, cybersecurity expert and analyst
- New Jersey Gov. Phil Murphy
Click here to browse full transcripts of “Face the Nation.”
MARGARET BRENNAN: I’m Margaret Brennan in Washington.
And this week on Face the Nation: America’s economy got a jolt late last week. We will speak exclusively with Treasury Secretary Janet Yellen about how the government can head off a potential crisis we haven’t seen since 2008.
Shockwaves are expected to hit when the global markets open following Friday’s collapse of Silicon Valley Bank, the biggest U.S. bank to fail in 15 years. What were the missed signals about the bank’s stability? And how could SVB’s failure impact the jobs and inflation outlook in the U.S.?
President Biden was upbeat Friday morning following an unemployment report that showed strong job gains.
(Begin VT)
JOE BIDEN (President of the United States): It’s not just good numbers. People can feel it.
(End VT)
MARGARET BRENNAN: But his administration has been hunkered down since then dealing with what could be a setback to economic progress.
We will ask Secretary Yellen what the administration plans to do to contain the fallout.
Plus, Democratic Congressman Ro Khanna represents the California district that’s home to SVB. We will ask him about the impact on the tech sector, America’s hub for innovation.
House Foreign Affairs Committee Chairman Michael McCaul will also be with us, as well as New Jersey’s Democratic Governor Phil Murphy.
And, finally, we will take a look at the power of women in the face of adversity as they fight to overcome new roadblocks to gender equality.
It’s all just ahead on Face the Nation.
Good morning, and welcome to Face the Nation.
Government regulators have been working through the weekend to contain the spillover from the collapse of Silicon Valley Bank. But reverberations have already been felt overseas from Europe to Israel.
Back home, the concern is especially acute in America’s technology sector. President Biden spoke last night about the government’s response to SVB’s failure with California’s Governor Gavin Newsom, who has emphasized the need to protect America’s innovation ecosystem. The turbulence comes at a complicated moment for the U.S. economy.
CBS News senior national correspondent Mark Strassmann is in Atlanta with more.
(Begin VT)
MARK STRASSMANN (voice-over): Help wanted, nearly 11 million open jobs in a labor market that’s still sizzling, more than 300,000 hires last month, more than 800,000 already this year.
One big winner, the leisure and hospitality sector, two-thirds of its employees women. For the last four months, women have outgained men for new jobs.
JOE BIDEN (President of the United States): I think all this matters. It’s no accident. It means our economic plan is working.
MARK STRASSMANN: But economists also need help. They’re trying to solve this muddle of a post-pandemic economy, inflation stubbornly above 6 percent, despite the fastest rise in interest rates in four decades, more signs of these inflationary times, rises in total mortgages and total household debt.
The Fed has a lot to think about.
MAN: I think inflation definitely hits different areas of the economy in different ways.
MARK STRASSMANN: Just like the impact of interest rate hikes.
California’s Silicon Valley Bank, poorly hedged, has collapsed. Depositors panicked in the biggest bank fail since the 2008 financial crisis. Rising interest rates hobbled the bank’s loans and investments. The FDIC has taken control, but a worried Wall Street ended down on Friday.
WOMAN: The market may be fearing more contagion risk of financial instability.
MARK STRASSMANN: The law of unintended consequences, one more consideration for the Fed mulling over interest rates as a whip to tame inflation’s lion.
JEROME POWELL (Federal Reserve Chairman): If the totality of the data were to indicate that faster tightening is warranted, we’d be prepared to increase the pace of rate hikes.
(End VT)
MARK STRASSMANN: Looking for more clarity? Patience, at least for another couple of weeks.
The latest numbers from the Consumer Price Index come out on Tuesday, and the Fed will meet again next week to consider raising interest rates yet again — Margaret.
MARGARET BRENNAN: Mark Strassmann, thank you.
(Begin VT)
MARGARET BRENNAN: We go now to Treasury Secretary Janet Yellen.
Madam Secretary, good morning.
JANET YELLEN (U.S. Treasury Secretary): Good morning, Margaret.
MARGARET BRENNAN: I want to get straight to it, because the markets will soon reopen for trading.
Does the government need to intervene and take emergency measures because of SVB’s failure?
SECRETARY JANET YELLEN: Well, let me say America’s economy relies on a safe and sound banking system that can provide for the credit needs of our households and businesses.
So, whenever a bank, especially one like Silicon Valley Bank, with billions of dollars in deposits, fails, it’s clearly a concern. From the standpoint of depositors, many of which may be small businesses, they rely on access to their funds to be able to pay the bills that they have, and they employ tens of thousands of people across the country.
We’ve been hearing from those depositors and other concerned people this weekend. So let me say that I have been working all weekend with our banking regulators to design appropriate policies to address this situation.
I can’t really provide further details at this time.
MARGARET BRENNAN: Yes.
SECRETARY JANET YELLEN: But what I do want to do is emphasize that the American banking system is really safe and well-capitalized. It’s resilient.
MARGARET BRENNAN: Can you say whether these problems were unique to Silicon Valley Bank? Or can you say whether there will be other regional bank failures?
SECRETARY JANET YELLEN: Well, look, let me just say that we want to make sure that the troubles that exist at one bank don’t create contagion to others that are sound.
And a goal always of supervision and regulation is to make sure that contagion can’t — can’t occur.
MARGARET BRENNAN: Your counterpart in the United Kingdom has said that the government there has ruled out a bailout of the U.K. arm of Silicon Valley Bank.
Have you also ruled out that kind of government intervention?
SECRETARY JANET YELLEN: Well, let me be clear that, during the financial crisis, there were investors and owners of systemic large banks that were bailed out.
And we’re certainly not looking, and the reforms that have been put in place means that we’re not going to do that again. But we are concerned about depositors and are focused on trying to meet their needs.
MARGARET BRENNAN: Do you expect a deal or something to happen that can reassure the markets before Asia opens tonight, and U.S. markets open tomorrow?
SECRETARY JANET YELLEN: We certainly are working to address the situation in a timely way.
MARGARET BRENNAN: Now, I know you know this region of the country so well, because you served at the San Francisco Fed years ago.
SECRETARY JANET YELLEN: Yes.
MARGARET BRENNAN: The tech sector has already been suffering from layoffs. It’s already under pressure, and this is really the hub of American innovation.
How severe will the consequences be for that innovation?
SECRETARY JANET YELLEN: I think it depends on how this situation is resolved.
But I’m well aware that many start-up firms have deposits and venture capital firms have deposits at this bank that have been affected by its failure. So this is something we’re working to try to resolve.
MARGARET BRENNAN: You know, when you look big picture at this, this bank had massive exposure to this one particular industry.
How did government regulators miss that risk?
SECRETARY JANET YELLEN: I would say that, although the tech sector has been suffering from a downturn and it’s had some significant layoffs, the problems of this bank, from reporting about its situation, suggest that, because we’re in a higher interest rate environment, assets that it holds, many of which are Treasury assets or mortgage-backed securities that are guaranteed by the government, lose market value.
And the problems of the tech sector aren’t at the heart of the problems of this bank.
MARGARET BRENNAN: Do you foresee what’s happening now as making it harder for Fed Chair Powell to continue with the kind of rate hikes he’s indicated he plans?
SECRETARY JANET YELLEN: The Federal Reserve is independent and charged with making judgments about what the appropriate course of action is to address financial risks and also to achieve their inflation and employment goals.
And I’m not going to comment on what the appropriate response is for them. They will be evaluating this in the days and weeks to come.
MARGARET BRENNAN: Would you be open to a foreign bank coming in as a white knight to help stabilize the situation with Silicon Valley Bank?
SECRETARY JANET YELLEN: So, this is really a decision for the FDIC, as it decides on what the best course is to resolve this firm.
And I’m sure they’re considering a wide range of available options that would include acquisitions.
MARGARET BRENNAN: Madam Secretary, I’m told you are tight on time, and I have to leave it there.
Thank you for your time this morning.
SECRETARY JANET YELLEN: Thank you so much, Margaret.
(End VT)
MARGARET BRENNAN: We’re joined now by Congressman Ro Khanna. He is a Democrat who represents the California district where Silicon Valley Bank was once headquartered.
Good to have you here.
I wonder what you make of the Treasury secretary’s remarks? I know you have been in contact with the White House, with Treasury and with FDIC.
REPRESENTATIVE RO KHANNA (D-California): I have great respect for Secretary Yellen, but I think we need to have more clarity and greater strength in what Treasury is saying.
First, the principle needs to be that all depositors will be protected and have full access to their accounts Monday morning.
MARGARET BRENNAN: All depositors meaning those with accounts bigger than $250,000, which is the cutoff for insurance right now?
REPRESENTATIVE RO KHANNA: Yes, all of them.
There’s precedent for this. Chair Powell, when he was at Treasury in 1991, the Bank of New England collapsed. And Chair Powell said the Treasury, coordinated with FDIC and with the Fed, and they insured every depositor then. And why did they do it? They didn’t want a regional run on the banks.
Here’s what I’m hearing from people in my constituency. They are getting notes to pull out of regional banks. And all of this will be consolidated in the top four banks. We don’t want that as a nation, especially if you’re progressive.
The other thing is the payroll companies that are involved. Some of them have 400,000 folks. They’re not going to be able to meet payroll if they don’t have access to the deposits. And then — go ahead.
MARGARET BRENNAN: No, so you want — you wanted to hear from the Treasury secretary a statement that said the U.S. government will guarantee all depositors?
REPRESENTATIVE RO KHANNA: Yes, just like they did with the Bank of New England.
Now, here’s the thing. It’s not going to cost taxpayers money, because if you look at the financials of SVB, they have the assets. They have the assets. They don’t have the liquidity. What happened is, they had these long-term Treasury bonds. And then the Fed hiked interest rates very, very fast. We can debate the wisdom of that.
MARGARET BRENNAN: Right.
REPRESENTATIVE RO KHANNA: And they were — this was the — the cause. Those — those assets still have value. We need the liquidity.
Now, there may have been mismanagement. And we can get into that. But, right now, the key thing is for the depositors to have access to those accounts.
MARGARET BRENNAN: So, the Treasury secretary also said that acquisitions are an option here. That indicates perhaps a private sector option with another bank or other banks buying up these assets and taking these on.
Are you comfortable with that?
REPRESENTATIVE RO KHANNA: Yes. And that would be the ideal situation. And our delegation that talked to the FDIC last night, made that clear.
But to have that happen, you’re…
MARGARET BRENNAN: Is that what FDIC is working on?
REPRESENTATIVE RO KHANNA: That’s what we urged them to work on.
MARGARET BRENNAN: Yes.
REPRESENTATIVE RO KHANNA: They said they’re working on it.
But to have that happen, you need FDIC and Treasury involved, because these assets are not liquid. And they may pay off 10 years from now. I don’t think you’re going to get a private seller without the Treasury Department and FDIC being actively engaged in having — helping liquidity with these Treasury bonds.
MARGARET BRENNAN: And you know that’s not happening?
REPRESENTATIVE RO KHANNA: Whether they’re engaged. I think they need to be engaged. They say they’re engaged, but they need to resolve this by Monday morning.
MARGARET BRENNAN: Yes.
REPRESENTATIVE RO KHANNA: And I think the way to resolve it is to say, depositors will have access to their accounts.
Look, the bargain in our country from FDR has always been, investors, shareholders lose. I have no sympathy for the executives, no sympathy for people who have stock there. But the depositors are protected. And let’s talk about who these depositors are. They are not just the payroll companies. These are climate start-ups. These are start-ups that are helping cure cancer.
MARGARET BRENNAN: Yes.
REPRESENTATIVE RO KHANNA: These are companies in the wine industry. These are companies that are dealing with A.I. and defense to keep us ahead of China…
MARGARET BRENNAN: Right.
REPRESENTATIVE RO KHANNA: … 50,000 of them. And they’re employing Americans across the country.
And all they’re — they didn’t take risks. They just had their money in a bank. And we’re saying those need to be guaranteed.
MARGARET BRENNAN: Well, the president apparently spoke with the governor of California last night. Do you think the president understands the gravity of what you’re laying out here, if you don’t think the Treasury is speaking to this or that the Fed is addressing it?
REPRESENTATIVE RO KHANNA: I think they understand the gravity, but they need to take decisive action.
MARGARET BRENNAN: Because time is ticking here?
REPRESENTATIVE RO KHANNA: Time is ticking.
(CROSSTALK)
REPRESENTATIVE RO KHANNA: And it’s by Monday morning.
And I would just urge them and Chair Powell to look at what he said in his own speech in 2013. And the question I’d ask Chair Powell is, if it was good enough for the Bank of New England, and you understood what was going to happen with a regional run — look, I think the U.S. banking is secure. I don’t think this is a systemic risk.
Here’s what’s going to happen. Every person in these tech companies is getting e-mails: Pull your money out of the regional banks.
MARGARET BRENNAN: Yes.
REPRESENTATIVE RO KHANNA: Put them in the big four.
MARGARET BRENNAN: What’s the problem? Is it political will? Is it concern that there will be blowback for the administration?
I mean, why wouldn’t there be the immediacy? Or are you indicating it’s Chair Powell that you know is opposed?
REPRESENTATIVE RO KHANNA: No, I don’t think — I think it’s just that, right now, things move at the speed of Twitter, and the government doesn’t move at that speed.
And I think they don’t realize what the problem could be and how fast money is moving and the challenge this could be. There is no systemic risk, but there is a risk on consolidation.
MARGARET BRENNAN: Yes.
REPRESENTATIVE RO KHANNA: And, by the way, progressives should be the most concerned about this.
I mean, you don’t want banking sector to be J.P. Morgan, Citibank, Bank of America, and Wells Fargo…
MARGARET BRENNAN: Well, it may have to be, right, is what you’re saying, if the government is not going to do anything.
REPRESENTATIVE RO KHANNA: Yes.
That’s what is going to happen, if the government doesn’t — doesn’t step up here. And it’s not going to cost taxpayers, because the assets are there.
MARGARET BRENNAN: The assets are there, so — which is why you’re saying government bailout is not what you’re talking about…
REPRESENTATIVE RO KHANNA: No.
MARGARET BRENNAN: … just to be — just to be clear here.
You tweeted yesterday, that government also needs to investigate short sales by corporate executives. That’s betting a stock price is going to go down. Bloomberg also reported that the CEO of SVB bank, Gregory Becker, sold $3.6 million of stock the day before the company collapsed.
What exactly do you think occurred here?
REPRESENTATIVE RO KHANNA: Well, first of all, we need all the facts.
I do think that money should be clawed back and used for places like Silicon Valley Community Center in my district that has money that they can’t get.
MARGARET BRENNAN: Clawed back from the CEO, who you know.
REPRESENTATIVE RO KHANNA: Clawed back from the — clawed back from the CEO, who I have known.
But whether there was something nefarious or not, look, you know 10b-5s, where they have to make the sale years before or monthly — the month before.
MARGARET BRENNAN: Regulatory filings. I see what you’re saying.
REPRESENTATIVE RO KHANNA: So I don’t want people to jump to conclusions. But I do think all that money should be clawed back and given to the depositors
MARGARET BRENNAN: To the — to the depositors, insured or otherwise?
REPRESENTATIVE RO KHANNA: Insured or otherwise.
MARGARET BRENNAN: So, what do you think the big-picture impact is or could be on the heart of American innovation? I mean, the tech sector is very important to American competitiveness.
REPRESENTATIVE RO KHANNA: It means that the companies that are looking for cures to cancer, the companies that are doing the climate work, the companies that are keeping us ahead of China on A.I. and defense technology, all of them are at risk.
Some of them will go under. Some of them are going to be laying people off. It’s going to mean people aren’t going to be able to make their rent. It — here’s the point. All of the legislation we passed in Congress, the IRA to tackle climate, the chip sector bring semiconductors back, it relies on the innovation pipeline. It relies on the tech pipeline.
And that is why this is such an important issue. What is being — what is hurting it is the rapid rise of interest rates, as well as now this systemic risk. And it’s going to hurt the innovation pipeline, and it’s going to hurt ordinary people.
MARGARET BRENNAN: Well, we are going to watch carefully what’s happening in your district.
Congressman, thank you for coming on and giving us insight. We wish you luck.
REPRESENTATIVE RO KHANNA: Thank you.
MARGARET BRENNAN: The annual Gridiron Dinner in Washington is traditionally an opportunity for politicians and journalists to take aim, with humor, at each other.
But at the end of his speech last night, former Vice President Mike Pence put the jokes aside and issued his strongest condemnation to date on President Trump and his role in the January 6 attack — quote — “President Trump was wrong. I had no right to overturn the election, and his reckless words endangered my family and everyone at the capital that day. History will hold Donald Trump accountable for his actions.”
Pence also addressed recent attempts to sanitize January 6, indirectly criticizing FOX News’ Tucker Carlson. Pence said that — quote — “It was not, as some would have you believe, tourists visiting the Capitol. Tourists don’t injure 140 police officers by sightseeing. Tourists don’t break down doors to get to the speaker of the House.”
He also added that: “It mocks decency to portray it any other way.”
When we come back, we will have a lot more Face the Nation. Stay with us.
(ANNOUNCEMENTS)
MARGARET BRENNAN: We turn now to the chairman of the House Foreign Affairs Committee, Texas Republican Congressman Michael McCaul.
Good morning to you, Chairman McCaul.
REPRESENTATIVE MICHAEL MCCAUL (R-Texas): Good Morning, Margaret.
MARGARET BRENNAN: I have got a lot to get to with you today.
But I want to start where I just left off with those very strong remarks from Mike Pence last night. Do you want to associate yourself with what he said?
REPRESENTATIVE MICHAEL MCCAUL: Let me just say Vice President Pence exercised moral clarity and judgment that day by doing his constitutional responsibility, authenticating the votes and counting them.
He avoided a major constitutional crisis that day. As you know, I voted for certification. That is our constitutional role not to overturn state- certified ballots. So, I agree. I mean, look, it was a dark — dark day. And I think people will be — history will judge everyone by what they did that day.
MARGARET BRENNAN: Mm-hmm.
It was a pretty strong condemnation of Donald Trump, who he hasn’t directly taken on like that before. But it’s also back in the news very much, Chairman, because it was the speaker of the House who gave those 41,000 hours of surveillance video access to FOX News, which then has used a recasting of the events, trying to sanitize it, trying to whitewash history.
Do you think it was a mistake for Republican leadership to strike this deal with Tucker Carlson? That is who Mike Pence was talking about.
REPRESENTATIVE MICHAEL MCCAUL: Well, I know Kevin McCarthy has turned all the videotape over to FOX News.
He has given me assurance he’s going to turn it over to the entire media. I think — I believe in the fourth estate, freedom of press, and I think the American people deserve to see all the footage from that day, and all the footage is not going to be tourism at the Capitol. It’s going to show a very dark, tragic day that I witnessed firsthand that included our Capitol Police being assaulted, 140 of them injured, two pipe bombs, one — one Capitol police officer killed, and a protester killed.
That’s not — that’s not a good day. And I think it should have been prevented had we had good intelligence that day beforehand. And, look, I support law enforcement. Like this D.C. crime bill we were passing, I support law enforcement everywhere, especially at the United States Capitol.
MARGARET BRENNAN: I want to ask you on the other side of an upcoming commercial break about the hearing you just held on Afghanistan.
But, before I do that, I want to quickly ask you about what we’ve been talking about, with the Treasury Secretary saying no government bailout for this Silicon Valley Bank, but they are trying to take some action.
She didn’t give a lot of detail there. I know Austin is a start-up hub in your home state of Texas. How concerned are you about spillover here?
REPRESENTATIVE REPRESENTATIVE MICHAEL MCCAUL: Yes, we do have South by Southwest this weekend, a lot of tech.
Yes, I am concerned, I hope it’s more of an isolated event, because the assets were very — it was all just technology sector and it wasn’t diversified, also, as the secretary mentioned these low interest bonds. And I think part of the problem, Margaret, is, in this inflationary time, the Reserve, Federal Reserve, now is raising interest rates, and that, I think, is part of the problem as well.
We want to make sure this is — this is an isolated event, and not a systemic event that could impact things like in 2008…
MARGARET BRENNAN: Yes.
REPRESENTATIVE MICHAEL MCCAUL: … when we did bailout the financial sector.
MARGARET BRENNAN: All right, I have got to take that break now.
And we’ll come back and continue our conversation in a moment.
(ANNOUNCEMENTS)
MARGARET BRENNAN: If you can’t watch Face the Nation live, you can set your DVR. We’re also available through our CBS and Paramount+ apps.
And we’re replayed on our CBS News Streaming Network.
(ANNOUNCEMENTS)
MARGARET BRENNAN: We will be right back with a lot more Face the Nation.
(ANNOUNCEMENTS)
MARGARET BRENNAN: Welcome back to FACE THE NATION.
We want to return now to our conversation with House Foreign Affairs Chairman Michael McCaul.
Now, Chairman, I mentioned that you held this hearing on Afghanistan this past week, and it was pretty emotional.
REP. MICHAEL MCCAUL (R-TX): Yes.
MARGARET BRENNAN: You’re really examining the chaotic withdrawal from that country. And you had a Marines Corps sergeant, injured in the suicide bombing, who testified that he was an eyewitness and he actually saw the suicide bomber before the attack. He testified he has never been interviewed as part of the U.S. investigation.
How was this overlooked?
REPRESENTATIVE MICHAEL MCCAUL: I think it’s very — well, first of all, very powerful testimony. Very emotional. But very devastating and damaging to the administration. These – these snipers and troops were put at HKIA, surrounded by the Taliban.
MARGARET BRENNAN: The airport in Kabul.
REPRESENTATIVE MICHAEL MCCAUL: They put the Taliban in — in Kabul. That’s the HKIA airport. And surrounded by the Taliban who were put in charge. And that was the first mistake in the chaos that we heard that happened that day and the State Department virtually non-existent.
I think the most dramatic thing, Margaret, was the fact that this sniper had the suicide bomber in his sights and an intelligence bulletin went out, you know, describing him. He said, this is — this meets the description, meets with the team, PSYOPS, psychological operations get together, they run this up the chain of command and the commanding officer says, I don’t have the authority. And then they said, who does have the authority for permission to engage, and the commanding officer says, I don’t know, and he never got back to them.
The point is, they could have taken out this threat. But then, when the suicide bomber went off, not only did Marine Sergeant Vargas Andrews have his leg blown off and his arm, but we had 140 Afghans killed, 13 service men and women killed.
I talked to the mother of one of the Marine sergeants.
MARGARET BRENNAN: Yes.
REPRESENTATIVE MICHAEL MCCAUL: I gave her just a hug. She was so devastated. In addition to 50 injured, including Marine Sergeant Vargas Andrews.
MARGARET BRENNAN: Yes.
REPRESENTATIVE MICHAEL MCCAUL: And it could have been avoided.
MARGARET BRENNAN: Well, to the point of how it could be avoided. You know, you – you hear it, there were intelligence failures. Events just got ahead of planning.
The State Department argues that they’ve briefed Congress more than 150 times since the withdrawal. What information do you need that you don’t have yet?
REPRESENTATIVE MICHAEL MCCAUL: Well, I think the compelling testimony we got from the sniper. We’ve never heard this before. In fact, Margaret, this is the first open hearing we’ve had on Afghanistan since the fall of Afghanistan. And I intend to move forward with this investigation. And I what to know what the commanding officer was thinking when he denied permission to take out the threat and how — what levels did it go to within the United States government? I think those are all very important questions.
And the State Department has not been compliant with our document requests. I met with the secretary. We had a very cordial conversation. Cooperation is always key. But they’re not cooperating. If he fails to cooperate with my document production request by, you know, the time he testifies on March 23rd, I am prepared to issue a subpoena.
MARGARET BRENNAN: And issue — issue a subpoena for Antony Blinken to come testify before your committee. What exactly do you think he’s withholding? What’s the documents?
REPRESENTATIVE MICHAEL MCCAUL: No, he is – he — he will be testifying, but we have an outstanding document production request that the lawyers are very combative. I think the secretary, in good faith, has told me he wants to cooperate with this investigation, be transparent to the American people, but we’re not seeing that with the lawyers handling this on the ground. So, we need these documents because a lot of this stuff, to your point, Margaret, has never been brought out to the public.
MARGARET BRENNAN: Yes. This is the dissent cable specifically that you are requesting, that is people within the State Department disagreeing with the policy that was the administration’s planning?
REPRESENTATIVE MICHAEL MCCAUL: It’s a dissent cable. The extraordinary measure to have 23 members of the State Department at the embassy dissenting with the policy.
MARGARET BRENNAN: Yes.
REPRESENTATIVE MICHAEL MCCAUL: The after action report from the ambassador. But also the plan of evacuation. Just a simple plan of evacuation. What was your plan? They have failed to deliver that to Congress. Those are three key, you know, areas that we want to see compliance with.
MARGARET BRENNAN: Yes.
All right, Congressman, we will be watching that. I know there are a number of other issues we’ll talk to you about sometime soon, including China, but I’ve got to leave it there for today.
And turn now to Chris Krebs, who is former director of the cybersecurity and infrastructure security agency. He’s also a CBS News expert and analyst.
It’s good to have you here.
CHRISTOPHER KREBS (Former Director, Cybersecurity and Infrastructure Security Agency): Good morning.
MARGARET BRENNAN: Before we get to what’s happening with the Silicon Valley Bank, I want to ask you about what has happened with this data breach? We learned on Wednesday that certain members of the House and Senate were told personal data, including like home addresses and Social Security Numbers, was taken from a D.C. health insurance provider.
CHRISTOPHER KREBS: Right.
MARGARET BRENNAN: It’s like 56,000 people. And then that information is being sold online.
CHRISTOPHER KREBS: Yes.
MARGARET BRENNAN: Who’s behind this?
CHRISTOPHER KREBS: So, a cybercriminal known as IntelBroker. And it’s not clear immediately who that person is, where they live. But they have been involved in previous data breaches and attempting to sell information on certain dark web markets. And the point here is that you steal the information and someone buys it and then they can monetize it through fraud and identity theft and things like that.
So, IntelBroker has previously claimed that they had access to U.S. federal agencies. This is a different case where they’ve actually taken information, they put it online and made it available for sale. FBI was able to get in and buy some of this information. It’s not clear if by buying that information it was deleted on the other end. But, you know, that’s what happens in this very, very vibrant cybercriminal ecosystem.
MARGARET BRENNAN: So, what more does the U.S. government need to do to protect, you know – I mean some of these staffers and lawmakers are at risk here. How do you protect against that and is this a state actor? Is there any involvement?
CHRISTOPHER KREBS: You know, it’s not — again, it’s not clear who the actor is.
MARGARET BRENNAN: OK.
CHRISTOPHER KREBS: It’s a cybercriminal. It’s very possibly a Russian- linked cybercriminal. Russia allows a very pervasive environment and permissive environment for cyber criminals. It actually helps the kind of broader Russian strategic objective to undermine confidence in the U.S.’ ability to protect citizens. It actually brings a significant amount of revenue into Russia.
But, you know, what happens next is kind of the question. So, for one, some of the markets where IntelBroker was selling this information, they’ve actually deactivated the IntelBroker account, reportedly. In part because these markets don’t want undue attention. They don’t want the FBI coming in and shutting it down. So, they try to stay below the radar.
Same kind of thing happened after the Colonial Pipeline breach that we spoke about – about a year and a half, two years ago. So, what will happen now is, if the information is available for sale, who buys it?
MARGARET BRENNAN: Yes.
CHRISTOPHER KREBS: Likely, again, fraudsters, but also possibly security services of our adversaries that are looking to get information on members of Congress for building their own portfolios and dossiers. Political operatives could buy it, you know, for opposition research and other – and other purposes. But the hope is that by kind of shading them out of the market and the FBI’s disruptive operations, they can ensure that this is not weaponized, this is not information that’s used for nefarious purposes.
MARGARET BRENNAN: You talk to tech companies and start-up companies, I know.
CHRISTOPHER KREBS: Yes.
MARGARET BRENNAN: A number of the businesses that had their accounts or loans with Silicon Valley Bank are very worried right now.
CHRISTOPHER KREBS: Yes.
MARGARET BRENNAN: They don’t have access to cash, even just to – to pay employees.
CHRISTOPHER KREBS: Right.
MARGARET BRENNAN: What are you hearing? Like, what is the level of panic here?
CHRISTOPHER KREBS: The biggest challenge right now I think these companies — and, again, it is 50 percent of VC-backed U.S. companies banked with Silicon Valley.
MARGARET BRENNAN: Venture capital.
CHRISTOPHER KREBS: It’s approximately 60,000 companies. The challenge they’re having right now is that they don’t have access to information, in addition to access to their money. I’ve talked to a number of companies that are banked with SVB, with Silicon Valley Bank, and they’ve not heard anything over the weekend.
Here’s the challenge, though. Most companies pay — issue payroll on the 15th and the last day of the month. The 15th is Wednesday. To make payroll on this upcoming Wednesday, you have to have that money in the bank tomorrow to process.
MARGARET BRENNAN: Yes.
CHRISTOPHER KREBS: By not having access to information, what money they will have access to tomorrow to process payroll, they’re now lining up alternative sources of funding. In some cases we’re seeing predatory loans. So, it would be very helpful, as Congressman Khanna pointed out, if we could get some clarity on the situation and, as the secretary mentioned, some guarantees for those depositors in place today. If a deal comes through today and access to funding is open tomorrow, that’s fantastic. But we’ve got to have some certainty and these company executives need information, they need clarity on what’s happening so they can take care of their employees.
MARGARET BRENNAN: Yes.
CHRISTOPHER KREBS: Or otherwise we’re going to see furloughs next week in the tech industry.
MARGARET BRENNAN: Well, and – and you heard the treasury secretary say we are in touch, or through the FDIC are in touch with depositors, but you are also saying, publicly, there needs to be clear statements of confidence to shore things up
CHRISTOPHER KREBS: Yes. Well, again –
MARGARET BRENNAN: And you didn’t get that is what I –
CHRISTOPHER KREBS: We’re not getting that right now.
MARGARET BRENNAN: Yes.
CHRISTOPHER KREBS: And I think this is, again, what Congressman Khanna was talking about with the speed of Twitter. Information travels so quickly. Yes, you can have runs on the bank, but you also need to get that information out there in the hands of the 60,000 companies that are banked there, over 250,000 FDIC insured limits, so that they can also communicate to their employees. No one wants to miss a paycheck.
MARGARET BRENNAN: Right.
CHRISTOPHER KREBS: And there are millions of employees with paychecks at stake next week.
MARGARET BRENNAN: And I did think it was interesting, because some have said to me, you know, these are medium-sized, small companies, startups. This isn’t big, bad Wall Street, right?
CHRISTOPHER KREBS: Right.
MARGARET BRENNAN: It’s a little bit more politically easy to convince the public if you want to step in and help smaller businesses. But that — what – what’s happening there with the politics of this?
CHRISTOPHER KREBS: Well, in part, I think that most of your viewers probably hadn’t even heard of Silicon Valley Bank until Thursday night, Friday morning.
MARGARET BRENNAN: Right.
CHRISTOPHER KREBS: But this really is the economic engine of the United States of America. This is the innovation engine. This is a lot of the future, the tech competition that we talk about with China and others. This is where it’s happening. These are the front lines. And we really need to ensure that the depositors – again, not the shareholders in the bank -MARGARET BRENNAN: Yes.
CHRISTOPHER KREBS: But the depositors in the bank have certainty so we don’t see further runs on tech friendly banks next week that go into systemically important banks. We really need this diversity in the banking system so we don’t concentrate risk at the top and have a much more fragile banking industry.
MARGARET BRENNAN: The next few hours may be key.
CHRISTOPHER KREBS: I think so.
MARGARET BRENNAN: And we’ll be watching for any update on that. I know we’ve heard – the Israeli prime minister has spoken on this. The British finance secretary has spoken on this.
CHRISTOPHER KREBS: Yes.
MARGARET BRENNAN: Now the treasury secretary. We’ll see what comes together in the next few hours.
Chris, good to have your analysis.
CHRISTOPHER KREBS: Thanks.
MARGARET BRENNAN: And we’ll be back with a lot more FACE THE NATION.
Stay with us.
(ANNOUNCEMENTS)
MARGARET BRENNAN: We’re joined now by New Jersey’s Democratic governor, Phil Murphy.
Governor Murphy, good to have you here in person.
GOV. PHIL MURPHY (D-NJ): Nice to be here, Margaret. First time in person.
MARGARET BRENNAN: Well, and – and you’re here in Washington to speak at that event we just mentioned, the Gridiron Dinner. You represented Democrats.
PHIL MURPHY: I – I did.
MARGARET BRENNAN: In your remarks. So you’re here for that.
There’s a “New York Times” profile of you that’s out with the headline saying, “A Trip to Ukraine, a Jab at Ron DeSantis. What is Phil Murphy Up To?”
What’s the answer to that question?
PHIL MURPHY: That’s a very good question. First of all, it’s good to be here. And I would prefer to say, I stapled the Gridiron speech to my appearance on FACE THE NATION. So —
MARGARET BRENNAN: There you go.
PHIL MURPHY: Listen, I’ve – I’m incredibly honored to serve as the governor of New Jersey. We inherited a state that was basically a trainwreck. And we got elected to fix it and got re-elected to continue to fix it. That is job number one, period, full stop.
I’m a former U.S. ambassador, which, in my case, was the Federal Republic of Germany. And, therefore, the international stuff is — continues to be important to us. New Jersey is one of the most international American states. So, direct investment, relations abroad matter a lot. I’m honored to chair as the National Governors Association, as well as the Democratic Governors Association. So, we have a few balls in the air, but New Jersey is – is job number one.
MARGARET BRENNAN: Well, the suggestion is that you might have political ambitions here in this town when your term is up, 2026. Have you considered running for president?
PHIL MURPHY: I – I will say this. I am 1,000 percent behind President Biden. And I haven’t really looked beyond that. He — I’m certain he’s going to run. He deserves to run. He’s earned that right. I think he’s had a great run here. And I’m going to be 1,000 percent behind him.
MARGARET BRENNAN: Why does the announcement for his re-election keep sliding? It was going to February. Now it’s April. When is he going to announce? If you’re certain he’s doing it, why not make it official?
PHIL MURPHY: I’m not sure I’ve got any inside information on that. I don’t think historically that he’s necessarily out of line when other incumbents have announced re-election. I know we’re all sort of expecting it’s next week, next month, whatever it might be. My guess is it’s sooner than later, but that’s – that’s something that the president himself will decide.
MARGARET BRENNAN: I want to get to some of the issues that Democrats want to run on and get your insight, but I – I want to quickly ask you about Silicon Valley Bank because New Jersey is, of course, adjacent to the financial hub of the country in New York City.
PHIL MURPHY: Yes (ph).
MARGARET BRENNAN: And so, there is concern about the overall banking sector. How concerned are you here?
PHIL MURPHY: Concerned, but not panicked. And I think that’s the place we need to be. Depositors and workers in the companies whose deposits are in that bank need to be job number one. We’ve got a big innovation economy in New Jersey. So, we’ve spent the weekend trying to make sure we’re out ahead of this. We don’t have a whole lot of exposure to SVB per say, but we do have a lot of tech companies. So, our economic development authority is preparing a package largely focused on liquidity, to be there in case we need to be there.
So, concerned, as you have to be when you have a bank of this size go down, but I don’t think there’s any need to panic. And I’m certain that the authorities at the federal level are working feverishly to come up with some sort of solution sooner than later.
MARGARET BRENNAN: When you say liquidity in this, you’re talking about the state stepping in to help some of the businesses that operate in New Jersey.
PHIL MURPHY: The start-up culture, the start-up tech firms in particular.
MARGARET BRENNAN: OK.
PHIL MURPHY: We want to make sure that, as we did during the Covid pandemic, that we are there for them, whether it’s loans or whatever the case may be, we want to make sure we’re not dragged by this. We want to – we’re trying to stay out ahead of it.
MARGARET BRENNAN: I also want to ask you about education in your state. You’ve taken aim, as we just mentioned, at Ron DeSantis, the governor of Florida, who’s widely expected to be running for president. You’ve said he’s prioritizing political culture wars ahead of academic success. You’ve faulted him for his dismissal of the College Board’s AP African American Studies course. He wouldn’t be doing that if he didn’t think it resonates for him politically. Why do you think it resonates for Democrats to engage in these culture war back and forth?
PHIL MURPHY: Well, listen, I – we — we ask ourselves always the question in substance, do we believe in teaching our whole history, the good, the bad, the ugly, nothing but the truth? The answer affirmatively is yes. So, in this case, AP African American studies, New Jersey has one high school teaching it this year. We’re expanding it to 26 next year.
He’s just trying to divide us. He’s trying to change the subject. He’s doing it for political reasons, I assume. We want to come back and say, listen, what is the substance? What – what do we owe our – our residents? And we believe strongly that we owe them the ability to read the books, to talk about our history. Again, whether we like it or not, let’s make sure we – we teach the — our country’s history, the whole truth and nothing but the truth.
MARGARET BRENNAN: Well, on the substance, when it comes to this particular College Board AP class, initially there were criticisms of the program. And you said they got rolled by DeSantis because you think he convinced them to delete parts of black history. So, if it’s flawed academic, why are you expanding it to 26 schools?
PHIL MURPHY: First of all, they did get rolled. They claim they – they were not rolled, but let’s — let’s call that for what it is, they got rolled. Florida weighed in heavily.
The good —
MARGARET BRENNAN: Which the College Board disputes.
PHIL MURPHY: The — yes.
The good news is, you have a fair amount of latitude in terms of what you actually — the curriculum looks like at the district level. And I’ve been asked before, well, does this mean that everything is 100 percent the way you’d teach it? I’m not sure it is or it isn’t. But the fact of the matter is, it must be taught. And you do have latitude in terms of constructing that curriculum at the district level. And that’s what we’re going to do in New Jersey. And that’s the way it should be.
MARGARET BRENNAN: There are reports in “The Washington Post” that Wednesday is the day that a Texas judge who could undue — you’re following this story in regard to the abortion pill — he could undue government approval of this drug, which is the — one of the most common ways to – to obtain an abortion these days.
Out in the state of California, their governor has taken the stance of refusing to do business with pharmacies that say they won’t sell the drug in certain states. Are you ready to take a stand like that against Walgreens or other pharmacies?
PHIL MURPHY: Yes. I don’t expect that we will take a stand like that, but we are — we want Walgreens and CVS and others to do the right thing, which is to be there for especially women, to uphold their reproductive freedoms and not take them away. The villain here isn’t the governor of California for sure. The villain here are the attorneys general and governors in many — sadly, many states right now in this country that are taking freedoms away from Americans, particularly women, particularly reproductive freedom.
MARGARET BRENNAN: Yes.
PHIL MURPHY: That — those – those are the villains in this drama.
MARGARET BRENNAN: Why — are you uncomfortable putting that kind of – of pressure on companies to craft social policy?
PHIL MURPHY: No. We’re not uncomfortable about that at all. But we want to do the thing that gets the best result. And our – our teams were on, for instance, on Friday, at very senior levels, with Walgreens and CVS, making sure they heard loud and clear that we expect them to do their part to uphold women’s reproductive freedoms.
MARGARET BRENNAN: OK.
Governor, good to have you here in person.
PHIL MURPHY: Nice to be with you.
MARGARET BRENNAN: We’ll be right back.
(ANNOUNCEMENTS)
MARGARET BRENNAN: The resilience and strength of women around the world are cause for celebration, as we mark Women’s History Month. But despite the strides made in the last century, this moment may require a call to action.
(BEGIN VT)
MARGARET BRENNAN (voice over): The reversal in women’s rights is now officially a global emergency.
MALE: (INAUDIBLE) won over decades is vanishing before our eyes.
MARGARET BRENNAN: That backsliding, according to the U.N. chief, means gender equality is now 300 years away.
In Afghanistan, the Taliban’s gender persecution may be a crime against humanity. Women are virtually erased from public life. Girls are banned from attending school beyond sixth grade.
Iran’s schoolgirls are allowed into the classroom, but hundreds have been mysteriously poisoned when they get there.
The White House speculated it could be payback for protests against the regime, which erupted after 22-year-old Mahsa Amini died in September after the so-called morality police detained her for showing her hair.
Viral videos like this one show schoolgirls daringly removing their headscarves in solidarity, inspiring women around the world.
Ukraine’s women are stunningly strong, caring for and protecting their families while the men are at war. Some taking up arms. Others, leading humanitarian efforts.
Yulia Pievska (ph) spent three months in a Russian prison for evacuating women and children from besieged areas. An inspiration to the resistance.
Around the world, the maternal mortality uptick mars child birth, something America’s first female vice president has highlighted.
The rollback in reproductive rights complicates life further. So, too, does the skyrocketing costs of childcare.
Covid pushed many female caregivers out of the workforce and, in some areas of the world, forced children into marriage.
There are some bright spots. The 118th Congress has more women than ever before, though that’s only 29 percent of seats. More women of color are running for office and more women sit on corporate boards.
Those symbolic wins inspire and should mean something. To not let these setbacks stand or dissuade the next generation. That refusal to give in, that type of resilience is worth celebrating.
(END VT)
MARGARET BRENNAN: We’ll be right back.
(ANNOUNCEMENTS)
MARGARET BRENNAN: That’s it for us today. Thank you for watching. Until next week, for FACE THE NATION, I’m Margaret Brennan.
(ANNOUNCEMENTS)
