This is an audio transcript of the FT News Briefing podcast episode: ‘Joe Biden drops out of US presidential race’
Marc Filippino
Good morning from the Financial Times. Today is Monday, July 22nd, and this is your FT News Briefing.
[MUSIC PLAYING]
US President Joe Biden has dropped out of the 2024 race. Stick with us, folks, we’re in for a wild few months. Outside the US, India’s prime minister will present a major budget plan this week. And the UK’s new chancellor is getting ready to outline her economic priorities.
Chris Giles
The British public really would like to have continental European style public services and pay American levels of taxation.
Marc Filippino
But that’s pretty unlikely. I’m Marc Filippino and here’s the news you need to start your day.
[MUSIC PLAYING]
Joe Biden officially dropped out of the 2024 race for US president yesterday. He’s now endorsing his vice-president, Kamala Harris, to lead the Democratic ticket in the November election. It all happened after a horrible debate performance earlier this summer, where the president stumbled a lot and forgot his train of thought.
[CLIP OF DEBATE PLAYING]
Marc Filippino
That led to weeks of pressure from top leaders and donors to step aside. Lauren Fedor is the FT’s deputy Washington bureau chief and joins me now to talk about what comes next for Democrats in the 2024 US presidential election. Hey, Lauren.
Lauren Fedor
Hi, Marc.
Marc Filippino
All right, so you’re American. I’m American. But for our international listeners, just how big of a deal is Biden dropping out of the race?
Lauren Fedor
It’s hard to overstate how big of a deal this is. This has never happened before. We did have Lyndon B Johnson, an incumbent Democratic president, say that he wasn’t gonna continue running for re-election back in 1968, but that was in March of that year. We’re having this conversation at the end of July. There’s less than a month until the Democratic National Convention. There’s just over three months until the presidential election. That might sound like a lot of time, but when you’re talking about presidential election cycles that run years at a time, there is very little time between now and November for the Democrats to come up with a plan B.
Marc Filippino
The timing of this is interesting because, like I said earlier, the debate was a few weeks ago now and the calls for him to step down have been strong since that point. They haven’t wavered. What finally pushed Biden to step down yesterday?
Lauren Fedor
There are a couple of things, the president has said that he’s gonna come out and speak to the American public more about his decision, so he may reveal more about his personal thinking. But I’d say the calls publicly grew a lot louder in the last couple of days, and they just kept coming. There was also the reality that we had campaign finance figures published this weekend. They actually only covered through the end of June. But what they did show was a Biden campaign that was burning through money. And our reporting has found that post-debate in this month, in July, the money’s now been drying up. Donors weren’t willing to be cutting cheques anymore and running for president is a very expensive business. So that was probably on his mind as well. The president also, we haven’t seen him publicly for many, many days because he was diagnosed with Covid, if you remember, last Wednesday.
Marc Filippino
Right.
Lauren Fedor
He went to his holiday home in Delaware to recuperate, but that clearly gave him some time and space to consider this decision before he chose to announce it on Sunday.
Marc Filippino
What does this mean for the upcoming Democratic National Convention? We just had the RNC. The DNC is less than a month away.
Lauren Fedor
Yeah, it’s really gonna be up to the DNC to firm up the rules. The convention is in addition to, you know, a party for the party, as it were. It is the forum in which delegates will officially select the nominee, but they need to figure out the kind of T’s and C’s of how that’s gonna happen before it does.
Marc Filippino
Is there any inclination that someone might challenge vice-president Harris?
Lauren Fedor
It’s very unclear at this point. Generally speaking, a lot of Democrats have been talking about the need for an open and transparent process. But, you know, our reporting at the Financial Times has shown that, some of the other names that are often floated as possible presidential contenders, people like Gavin Newsom and Gretchen Whitmer, they’re unlikely to be throwing their hats in the ring or are likely to be endorsing her as well on the days to come. So never say never. But there’s also, I think, a inclination across the Democratic party that they want to unite behind a single candidate, get focused on trying to close their polling up on Donald Trump and make a plan really to head in not only in the convention, but polling day in November.
Marc Filippino
So, Lauren, Democrats pressured Biden to the point where he announced that he was stepping out of the race. What does that tell you about how Democrats are thinking about November?
Lauren Fedor
I think what this tells you is that at the end of the day, Democrats didn’t want to lose, and they fear that they were going to lose with Joe Biden. And not only did they not want to lose, but they don’t want to lose to Donald Trump. Now, can Kamala Harris or any other Democrat defeat Trump at the ballot box? We’ll have to see. But I think it tells you a lot more about the party’s willingness to go the distance to try and stop Trump at any cost.
Marc Filippino
Yeah, we’ll be talking about this a lot. Lauren Fedor is the FT’s deputy Washington bureau chief. Thanks, Lauren.
Lauren Fedor
Thanks, Marc.
[MUSIC PLAYING]
Marc Filippino
India’s prime minister is facing a big test this week. Narendra Modi is coming off an election win this year, and his new government is gonna have to present its first budget on Tuesday. It’ll last through March of 2025. And it’s a big deal, because this is the first time ever that Modi will have to work with his coalition partners on funding priorities. You see, the prime minister’s party, the BJP, didn’t win a majority in parliament, so he’s gonna have to make some compromises. Investors are gonna be watching closely to see how it all goes down. Modi has traditionally been fairly business friendly.
[MUSIC PLAYING]
The UK’s new chancellor is getting ready to step into the spotlight. Rachel Reeves will be giving a statement to Parliament on the Labour government’s economic policy later this month. Now it hasn’t always been smooth sailing for new chancellors. Remember Kwasi Kwarteng? His mini budget basically blew up the UK economy a few years ago. So here to talk to me about what Chancellor Reeves is up against is my colleague, Chris Giles. Chris, give it to me straight. Do you think this is gonna be a mini budget moment for Reeves?
Chris Giles
Well, it certainly won’t be one like the Kwasi Kwarteng-Liz Truss moment in 2022. In fact, the whole point of this moment is to be the polar opposite of that, I would say. So what Rachel Reeves will do, she’s a new chancellor, she will be doing a little bit of opening the books, the projections that her officials have given her in her first couple of weeks in the role and the projections for the public finances. And it all look pretty awful. People say that the plans of the last government were not remotely sufficient to have the public services in health, in schools. Most acute is the prison service, where the prisons are literally just full. And so the government is going to have to release prisoners, which is a very difficult political decision to take, but there is no option there. So all adds up to what I’m sure Rachel Reeves will say is that actually more money is needed into the public sectors than the last government had budgeted for. She’ll say there’s a lot of difficult choices we need to make over the summer. She won’t decide what to do about it right there and then, but she will say that maybe the public has to think about some quite tough choices.
Marc Filippino
All right. So a lot of dire needs and not a lot of money to go around. What’s the chancellor’s plan then to get the UK out of this mess?
Chris Giles
Well, I think the plan is sort of three-fold. Number one, will be to blame the last government for the mess that she’s inherited. And in doing so, she will say, look, we can’t solve all these problems straight away. You, the public, will have to accept there will be difficulties in public services for some time. And it’s the last lot’s fault. The second thing I’m sure she will do is a little bit of extra taxation. Now, tax was a really important part of the election campaign. Labour said it had no plans to increase taxes on working people. I just don’t think they can go big on tax rises straight away because it was literally the thing the Conservatives said they would do it. And so the third thing I think they’ll do is to find ways to borrow more money.
Marc Filippino
OK, so blame the Conservatives, borrow a little bit more and tax just a little bit. Do you think that plan is gonna work?
Chris Giles
Actually, I do think it will work in the short term. I think you don’t need huge amounts of money to tide things over. So I think it works for the financial year 2025-26. And in the UK that runs from April to April. So I think you can then have some spending plans which are sufficiently generous so that things don’t get worse and get a little bit better. And then by that stage you will have enough time to roll the pitch again, blame the Conservatives even more, and then have a view on what you want to do in the longer term. And that might well involve more tax, but they would hope it also involve that they’re running the economy better and getting more growth and there’s more tax revenues. So I think it buys them a year or two for certain and not much more than that.
Marc Filippino
Just out of curiosity, how does the British public feel about all this?
Chris Giles
Well, the British public really would like to have continental European style public services and pay American levels of taxation. That is gonna be very difficult. So I think ultimately this government will have to decide whether we’re more likely to be a continental European country with taxes closer to half the size of the economy, or more like the US, where you have to pay for a lot more things privately. The public would like to go down the European route, whether the government can find sufficient routes to find taxes that are acceptable to fund that is an open question, I think still.
Marc Filippino
Chris Giles is the FT’s economics commentator. Thanks so much, Chris.
Chris Giles
Thank you very much.
[MUSIC PLAYING]
Marc Filippino
You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.
