When President Biden explained why his administration stepped in earlier this month to rescue two failed banks, he cast it as a decision to help small businesses make their payroll.
And he was emphatic that he was not bailing out Silicon Valley Bank and Signature Bank. "No losses will be borne by the taxpayers. Let me repeat that: no losses will be borne by the taxpayers," Biden said.
Bank bailouts are politically toxic, something voters made clear after the 2008 financial crisis. But for Biden, the alternative to a bank rescue could have been even worse, as he gears up for what's expected to be a second run for office in the 2024 presidential race.
"It's almost always better to put out fires before they spread. And this certainly looked like a spreading fire, albeit one that had not spread nearly as far as the 2008 fire," said Larry Summers, a top economic adviser in the Obama administration.
Biden's poll numbers on the economy have shown a persistent weakness, something strategists say could be challenging for Democrats given the weight that American voters traditionally place on the economy in presidential elections.
"I think this administration probably realizes that the biggest risk is erring on the side of doing too little," said Brendan Buck, who was an aide to two former House Republican speakers, John Boehner and Paul Ryan.
"If this is a moment that we get through because they act aggressively and it's forgotten about in a few months, then this is not a problem for them," Buck said. "But if this becomes a story we're still talking about a year from now, if there are lots of consequences that last for a while, and if it grows, this could be a presidency-defining, changing moment."
How bad is the b-word? Ask Bob Inglis
Back in 2008, during the worst economic crisis since the Great Depression, Congress passed a $700 billion bailout package called the Troubled Asset Relief Program (TARP).
Bob Inglis voted for that package. He was a six-term congressman from South Carolina. In an interview, he recalled getting a phone call from his local banker ahead of the vote, urging him to support the package for the health of the banking system.
But by 2010, Inglis found himself on the losing end of a primary challenge from a fellow Republican.
"I had committed various heresies against Tea Party orthodoxy. I had committed the mortal sin of voting for TARP," Inglis recalled in an interview.
Anger over the bailouts fueled populist protest movements
Many voters were wary of the bailouts. That anger fed into the rise of the Tea Party movement among conservatives, as well as Occupy Wall Street on the left.
Inglis said he understands why Biden is steering clear of the bailout term.
"I think there was a sense that the bad guys weren't getting theirs — and that the public was picking up the bill for the bad behavior," he said.
Jim Messina led former President Barack Obama's reelection campaign in 2012. He remembered navigating some of the fallout from the financial crisis.
"The average voter views 2008 as a bunch of rich Wall Street people did a bunch of bad things. No one went to jail and the taxpayers had to pay for it," Messina said.
Republican 2024 hopefuls have seized on the bank rescues
The Tea Party's economic populism helped fuel the rise of former President Donald Trump, who is in the running to lead Republicans again next year, and is already campaigning against the Biden administration's bank interventions.
"Joe Biden is leading us toward a Great Depression — I've been saying it for a long time. There should be no bailouts," Trump said in an online video.
Other Republicans eyeing a 2024 run have also been quick to try to make the bank rescues stick to Biden. Former South Carolina Gov. Nikki Haley described the intervention as "socialism for the rich."
And former Vice President Mike Pence linked the rescues to high inflation, which he blamed on Biden.
But Republicans aren't the only ones calling this a bailout. On the left, Adam Green with the Progressive Change Campaign Committee said he doesn't buy the administration's semantic argument, even though he understands the administration's immediate actions.
"It's politically toxic for politicians in either party to be seen as bending the rules to favor the rich and powerful," Green said. "Whether you call it a bailout or not — that's what is happening here."
Green said he thinks the White House would be wise to focus on holding people accountable for the bank failures, lest Republican challengers like Trump or Florida Gov. Ron DeSantis try to seize "the mantle of economic populism" for 2024.
"I think it's an Achilles heel, potentially, if Democrats are left holding the bag for what's seen as a bank bailout," Green said.
After the immediate rescue, Biden quickly called on Congress to make it easier to punish bankers for bad decisions. But any legislative changes would require support from both parties in a difficult political environment.
Biden faces bigger economic problems for 2024
It's too soon to say unequivocally that this month's banking turmoil will still be a potent political issue next year. But it could feed into a broader political issue for Biden: voters don't trust his handling of the economy, and that's a critical factor in presidential elections.
"What's really stunning right now is how negative people are about the economy," said Democratic pollster Celinda Lake.
While Biden regularly trumpets strong jobs and economic data, 75% of Americans have a negative take on how the economy is going. Lake said two-thirds of Americans believe that the country is in a recession, even though it is not.
"It's very concerning because people vote not on the absolute level of the economy, but the direction they think it's headed," Lake said.
Voter are particularly negative on corporations and profiteering, and want more regulations, she said. And that goes beyond the banking sector, tying in issues like the chemical spill from the recent train derailment in Ohio, prescription drug prices, and taxes on the wealthy — issues where she said Biden and Democrats are seen as strong.
And so Democrats are already trying to turn the blame back on Republicans. When Biden explained why his administration had intervened in the banking sector, he spoke about the need to strengthen the rules to make sure this type of failure doesn't occur again.
Biden pointed to the deregulation of mid-sized banks championed by the Trump administration. That's a political argument Gautam Mukunda of the Harvard Kennedy School thinks Biden could lean into.
"One can easily imagine in a debate in the fall of 2024, Biden saying, 'Hey, this was just yet another example of me cleaning up your mess,'" Mukunda said.
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