Republicans Divided On House Speaker, The Crypto Crisis, UK Faces Major Strikes : Up First : NPR

SCOTT SIMON, HOST:

With a single-digit majority, Republicans control the House and are still looking for a new speaker.

AYESHA RASCOE, HOST:

They’re thinking about tapping the minority leader, Kevin McCarthy, for the post. But does he have his party’s full support?

SIMON: I’m Scott Simon.

RASCOE: I am Ayesha Rascoe, and this is UP FIRST from NPR News.

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RASCOE: The crash of cryptocurrency exchange FTX has people wondering what’s next in that industry.

SIMON: And it prompts worries over another trading platform called Binance.

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UNIDENTIFIED PERSON: What do we want?

UNIDENTIFIED PEOPLE: Pay rise.

UNIDENTIFIED PERSON: How do we get it?

UNIDENTIFIED PEOPLE: Strike.

UNIDENTIFIED PERSON: What do we want?

UNIDENTIFIED PEOPLE: Pay rise.

UNIDENTIFIED PERSON: How do we get it?

UNIDENTIFIED PEOPLE: Strike.

SIMON: Tens of thousands of nurses, rail and postal workers in the U.K. on strike for better work conditions and higher pay.

RASCOE: We’ll tell you about the impact of their strike.

SIMON: So please stay with us. We’ve got the news you need to start your weekend.

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RASCOE: Republicans are divided on who to make speaker of the House after winning a narrow majority of seats.

SIMON: And the party’s current leader, Kevin McCarthy, still can’t sew up the votes. NPR political correspondent Susan Davis joins us. Susan, thanks for being with us.

SUSAN DAVIS, BYLINE: Good morning.

SIMON: Now remind us why Kevin McCarthy really can’t lose the vote of a single Republican if he’s going to be speaker.

DAVIS: Well, the whole House votes for the speaker, unlike any other elected party leader in Congress. And he’s going to need a majority of lawmakers present and voting to win. So if the full 435 members of the House are there, that magic number is 218. But that number can change depending on who shows up to vote. Now, that does mean he can only lose four Republicans and still win a majority to become speaker. And if you recall, after the November election, 31 Republicans in a secret ballot voted for someone else, and already five Republicans are publicly out against him. So he’s got work to do. You know, the vast majority of lawmakers support McCarthy. Many of them were wearing buttons around the Capitol this week that said, OK, only Kevin, they won’t vote for anyone else. But don’t expect Democrats to do McCarthy any favors here. No one’s going to cross the party aisle and vote for him. This is really seen as a test of party loyalty. And even McCarthy allies say there’s a possibility it could go to multiple rounds of ballots. It’s not unprecedented, but it’s very rare. And it hasn’t happened in 100 years.

SIMON: What are the arguments that those 31 Republicans who voted against him make against Kevin McCarthy?

DAVIS: Well, I think some people on the far right will never be satisfied with McCarthy, that they don’t see him as one of their own. For example, Matt Gaetz of Florida has essentially said he’ll never vote for him. A lot of these folks are just doing it as leverage, that they want to extract something out of him. It’s not unusual to see members try to use it to get something like a committee assignment. There’s also a bloc of conservatives that want to pressure McCarthy to agree to change the House rules, to make it easier for any member to bring up a motion that could force the speaker out of power in the middle of a session. Now, doing that would essentially make the speaker incredibly weak, especially in a narrow majority like the one he’s facing. And there’s an equally large or larger bloc of Republicans who are saying, absolutely don’t change those rules. And a lot of this sort of seems like Capitol intrigue, but it has a really practical effect on how the government functions. Nothing can happen in the House until a speaker is sworn in. It’s the first order of business in a new Congress. You can’t even swear in other lawmakers until there is an elected speaker.

SIMON: Looks like there’s a federal budget for next year or at least the first nine months of the remaining nine months of the fiscal year, at least a framework for a budget. What’s in it?

DAVIS: Don’t know the total cost yet, but it’s going to be about 1 1/2 trillion dollars. One thing we do know that’s in it – it’s got about $16 billion in earmarks for lawmaker projects. They return last year after a decade-long ban. I mean, good government groups do not like earmarks. They think they are rife for corruption. But Congress has decided that they are helpful for getting things done. And they might have a point here. If approved, as you said, everything will keep running until the end of next September. And it would give Kevin McCarthy, should he be speaker, some breathing room before he has to confront the possibility of a government shutdown on his own.

SIMON: House January 6 Committee is expected to release its final report Monday. Do we know if it will recommend that the Justice Department seek criminal charges against former President Trump?

DAVIS: It seems certain to. Already in a March court filing, the committee said Trump illegally obstructed an official proceeding, that being Congress’s counting of the Electoral College votes on January 6. That is a crime. The committee added in that filing that Trump also engaged in a criminal conspiracy to defraud the United States. That’s also a crime. Now, as we’ve said many times, these referrals don’t have the force of law. The Justice Department decides who and what to prosecute, but they are already investigating the former president. But it would put the House of Representatives on the record accusing the former president of crimes against the government. And I don’t think that’s an insignificant moment in terms of the historical record.

SIMON: NPR political correspondent Susan Davis, thanks so much.

DAVIS: You’re welcome.

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RASCOE: The fallout from the dramatic collapse of cryptocurrency exchange FTX continues.

SIMON: Its founder’s in jail. And the U.S. has charged him with orchestrating a massive fraud.

RASCOE: Now there are new concerns about another crypto trading platform. NPR’s David Gura is here to tell us all about it. Thank you so much for being with us.

DAVID GURA, BYLINE: Hey, Ayesha.

RASCOE: So by now, I think many of us have heard a whole lot about FTX and SBF. That’s Sam Bankman-Fried. And now it’s all about Binance. Like, tell me about that.

GURA: Yeah. Binance is the world’s largest cryptocurrency exchange by volume, and some people started to worry this week about the shape it’s in. I’ll give you a bit of backstory here. Binance was an early investor in FTX. Then it became one of FTX’s main rivals. And when FTX was falling apart, Binance offered FTX a lifeline, only to withdraw it at the last minute. I bring that up because we’ve learned a lot about how intertwined these crypto companies are. Lee Reiners teaches cryptocurrency law at Duke University.

LEE REINERS: So not only are they connected in terms of, you know, making loans to one another or holding, you know, the same assets, but oftentimes, you know, one crypto firm is invested in another crypto firm.

GURA: And part of the reason for this is they want to keep contagion from spreading when there is trouble. But the smallness of this world is contributing to a crisis of confidence. On Tuesday, Binance customers got spooked and withdrew more than a billion dollars’ worth of assets from the platform in one day, and Binance had to freeze some withdrawals temporarily. Basically, they haven’t forgotten the bank run on FTX that happened before it collapsed.

RASCOE: So how worried are investors and customers about Binance?

GURA: Well, there’s a lot of anxiety right now. FTX’s implosion has had everybody on edge. And this week, a report about a government investigation into Binance rattled its customers. But Binance is pushing back on that report and also on this comparison with what happened to FTX. It blamed that temporary freeze of withdrawals on a technical issue. And the head of Binance said the spike in withdrawals was business as usual. And in a separate statement, the company was emphatic it managed those withdrawals with ease.

You know, another consequence of the collapse of FTX is customers want reassurance their money is where it’s supposed to be, and it’s not going to disappear. And now crypto companies are going to have a harder time doing that. Several crypto exchanges were putting together what are known as proofs of reserve, basically showing they have enough money on hand to back deposits. But on Friday, the accounting firm Mazars, which reviewed many of these reports, the same firm that dumped the Trump Organization as a client earlier this year, by the way, said it had stopped working with all of crypto, including Binance. So that’s left them, Ayesha, without this respected company to vouch for them, essentially.

RASCOE: So how bad is the situation over crypto right now? Are people going to have to start using these paper money and, like, hiding it under their mattress?

GURA: Going back to the way it was.

RASCOE: (Laughter).

GURA: Look. It’s bad. It’s really bad right now, especially because this is such a tangled web of companies. A number of experts I spoke with, including Lee Reiners at Duke, said FTX’s implosion was a major setback for crypto.

REINERS: You have a situation like FTX, and it’s going to take time before, you know, anyone believes anything that, you know, the crypto industry and these crypto CEOs, you know, have to say.

GURA: This has turned off a lot of people from buying crypto. And companies have got a lot of work to do to get people to trust them again. You know, for most of this year, we’ve been in what’s called a crypto winter, Ayesha, this deep, prolonged downturn. Bitcoin, for instance, has fallen more than 60% this year. And so far, there are no signs any kind of recovery is on the horizon.

RASCOE: Yeah, I know we’ve talked about that crypto winter before. Can we take heart at least or maybe some reassurance from quick government response before crypto had become more widely used in society?

GURA: Yeah, we’ve seen a really fast response to the implosion of FCX. We’ve seen complaints from the two big financial regulators and criminal charges brought against Sam Bankman-Fried. The other bright spot is that for most people, this is just a wild story to follow and nothing more. Contagion has not spread to the banking system or the broader economy. And that’s something the Federal Reserve emphasized in a statement after a big meeting on Friday with the Treasury secretary and with top financial regulators.

RASCOE: NPR’s David Gura, thank you so much for joining us.

GURA: Thank you.

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RASCOE: Britain is facing a rolling series of strikes across several different sectors.

SIMON: Nurses, rail engineers, postal workers – they’ve all walked off the job.

RASCOE: And more strikes are scheduled for next week and over Christmas. Reporter Willem Marx is based in London and joins us now. Welcome to the show.

WILLEM MARX, BYLINE: Hey, Ayesha.

RASCOE: So who are these striking workers, and what’s been the impact?

MARX: Well, we start with nurses across England, Wales and Northern Ireland with them on strike. We’ve seen nonurgent hospital care put on hold. The nursing union agreed with the country’s National Health Service that they would step in as needed to save lives. You’ve got rail engineers and other rail workers, meaning the vast majority of England’s trains were not running yesterday and not running today. Some major routes have seen no service at all. Others have seen a bit of a skeletal timetable. And the major rail union is planning strikes on Christmas Eve and Christmas Day, which could, of course, severely disrupt holiday plans for many people. That’s not to mention the postal workers, who’ve announced seven days of strikes this month. Bus drivers, Border Force agents, ambulance drivers, as well.

RASCOE: So why are so many different types of workers striking at the same time?

MARX: There’s no single answer, but if you were to choose one, it would be inflation. And that’s because wages are just simply not keeping up with the very high rates of inflation in Britain right now. And given the tight labor market, employees, unions – they have leverage to demand better pay, often insist on retaining their current working conditions or improving them. On the railways in particular, unions insist this is about safety, about schedules. Nurses and ambulances also saying their systems are overstretched, and patients will continue to suffer the consequences if higher pay is not introduced. And that’s designed to encourage better recruitment and better retention.

RASCOE: So what has the government’s reaction been?

MARX: Well, there’s been pretty remarkable support for the striking workers across the country, particularly nurses, from a wide segment of British society. And that sympathy makes this a politically quite perilous situation for the Conservative government of Rishi Sunak, particularly in light of his party’s perceived mismanagement of the British economy over the past few months. In terms of the specific reactions, some ministers have got involved directly in negotiations between workers and employers at times. But ultimately, the message has been that however difficult the circumstances are for these workers, however important their roles are, the government is saying there’s simply not enough budget to spare for the billions in higher public sector wages that would be needed to keep up with the current high inflation level.

RASCOE: So does it seem likely then that the various demands will actually be met?

MARX: Well, they’re so widespread, it’s difficult to say yes definitively across the board. But there have been already a series of pay offers that some types of workers have accepted, for instance, on the Eurostar, the trains from the U.K. to Europe, as well as ground handlers at London Heathrow Airport. But a lot of other workers – teachers, civil servants, medical professionals – that rely on the government to increase their pay levels are finding that the Conservatives in government, with all the financial difficulties this year, are taking a pretty hard line on offering wage increases that match or indeed exceed inflation levels.

RASCOE: That’s London-based Willem Marx. Thank you so much for joining us.

MARX: Thanks so much.

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SIMON: And that’s UP FIRST for Saturday, December 17, 2022. I’m Scott Simon.

RASCOE: And I’m Ayesha Roscoe. UP FIRST is back tomorrow with a closer look at Steven Spielberg’s “The Color Purple” and a conversation about representation in film.

SIMON: And we’ve got more news, interviews, books, music, just plain fun sometimes every weekend on the radio.

RASCOE: Lots of fun – Weekend Edition every Saturday and Sunday morning on your local NPR station. Find your station at stations.npr.org.

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