Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: So David, it happened.
Speaker 1: It did. At the end of a long weekend and
Speaker 1: a few long.
Speaker 2: Weeks after mounting pressure from members of Joe Biden's own
Speaker 2: party in Congress, and finally reportedly from his former running
Speaker 2: mate and former President Barack Obama, Biden released a statement
Speaker 2: saying he'd drop out of the twenty twenty four US
Speaker 2: presidential race.
Speaker 3: Suddenly, on a Sunday afternoon, the dam broke.
Speaker 2: That damn broke via tweet. I called up Gregory Cordy,
Speaker 2: a White House and Politics reporter, to get his reaction
Speaker 2: to the news.
Speaker 3: The decision isn't a surprise, but the sudden timing of
Speaker 3: it was.
Speaker 1: And Sarah, we got an answer to that big question,
Speaker 1: would Biden drop out? But that only raised more questions.
Speaker 3: In addition to the decision not to run for reelection,
Speaker 3: there are a lot of decisions baked in that decision.
Speaker 3: Does he tap an air apparent? Does he endorse Kamala Harris.
Speaker 2: Who would donors back to replace him? Where does the
Speaker 2: Democratic Party go from here?
Speaker 1: And not long after his first announcement, Biden tweeted an
Speaker 1: endorsement of Harris, but that endorsement now kicks off an
Speaker 1: entirely new phase of the election, which means there are
Speaker 1: even more unknowns.
Speaker 2: The Democratic National Convention is just one month away. Voters
Speaker 2: will go to the polls in less than four months.
Speaker 2: Even if Harris clinches the nomination in Chicago in August,
Speaker 2: is there time for her to fundraise and advertise herself
Speaker 2: to the American people? How much money does a candidate
Speaker 2: really need to campaign successfully if they're taking over the
Speaker 2: ticket so late.
Speaker 4: In the year.
Speaker 3: Well, my first lots was it's gonna be a long
Speaker 3: three or four months. Now.
Speaker 1: This is the big take from Bloomberg News. I'm David
Speaker 1: Gura and I'm Sarah Holder.
Speaker 2: Today on the show, I dig into these questions with
Speaker 2: Gregory and with Money and Politics editor Laura Davison. As
Speaker 2: of Sunday evening, just hours after President Biden's announcement, not
Speaker 2: much was known about how he made the decision and
Speaker 2: how he thought about timing its release. I asked Gregory
Speaker 2: Cordy and Laura Davison about that.
Speaker 3: It's hard to say because he kept counsel only with
Speaker 3: a very small inner circle of aids on this. We're
Speaker 3: getting reporting that even his own campaign staff was blindsided
Speaker 3: by this announcement. He may have been waiting until after
Speaker 3: the Republican Convention for things to settle. He was in
Speaker 3: seclusion for the past few days recovering from a COVID infection,
Speaker 3: so he may have been waiting to see if he
Speaker 3: could ride that out and come back.
Speaker 5: It's really important to note that in the past, you know,
Speaker 5: essentially three weeks since the debate that really sparked all
Speaker 5: these concerns, Democratic donors have basically said, look, we are
Speaker 5: freezing contributions to your campaign. There have been a handful
Speaker 5: of donors who've come out and said I'm still with
Speaker 5: the president, but most folks said, look, we're not going
Speaker 5: to throw good money after bad. We want this guy out,
Speaker 5: and our leverage is donors is money. So you saw,
Speaker 5: you know, a bunch of different efforts. You know, some
Speaker 5: donors start different super PACs that they said, would you know,
Speaker 5: start collecting money that would go to whoever the eventual
Speaker 5: new nominee is. And this all came at a very
Speaker 5: critical moment when Trump had a ton of new donor support.
Speaker 5: You know, folks like Elon Musk and Timothy Mellon were
Speaker 5: coming in with really large donations, and they realized that, look,
Speaker 5: this is not a tenable situation here, this.
Speaker 2: Moment feels unprecedented, and people are already reacting all around
Speaker 2: the world. How do you expect markets to react?
Speaker 5: We do know that in the past couple of weeks,
Speaker 5: as Trump has seemingly grown stronger in his bid, that
Speaker 5: markets has started to price a Trump win in so
Speaker 5: that looks like, you know, a potential you know, increase
Speaker 5: in tariffs, particularly targeted Chinese goods, but all sorts of goods.
Speaker 5: Markets are also anticipating a pretty large tax cut if
Speaker 5: it's Trump. Anytime there is a seismic shift in what
Speaker 5: US leadership looks like, there will be market reactions.
Speaker 2: So, as part of his announcement, Biden endorsed Mamala Harris
Speaker 2: as the Democratic Party nominee. Doesn't mean Biden's campaign is
Speaker 2: shutting down immediately and Harris's is now jumping into action.
Speaker 2: What happens next, Gregory?
Speaker 3: Presumably, if Biden has his way and Vice President Harris
Speaker 3: has hers, she will take now the top spot of
Speaker 3: that ticket and recommend to the delegates at the convention
Speaker 3: next month who her choice for vice president would be
Speaker 3: her running mate. She would get to keep that sizeable
Speaker 3: war chest that Biden has built, but he started to
Speaker 3: burn through cash in the past month or so and
Speaker 3: it's not quite as formidable as they would like. So
Speaker 3: the first order of business is to rebuild that war chest,
Speaker 3: get some big donors on board through super packs, and
Speaker 3: then it will be up to the vice president, if
Speaker 3: it is her as a nominee, to decide how she
Speaker 3: wants to structure her campaign. But there's really not a
Speaker 3: whole lot of time right to completely blow up the campaign.
Speaker 3: It already has field offices, it's already bought a lot
Speaker 3: of ad time. That strategy is going to have to
Speaker 3: check change very quickly, of course, now that there's a
Speaker 3: new can at the top of the ticket. So a
Speaker 3: lot of these things we're going to just have to
Speaker 3: see in the coming days how that all comes to pass.
Speaker 2: Just how much money is currently in the Biden campaign
Speaker 2: coffers compared to Trump.
Speaker 4: So just on the raw dollar total, they're not too
Speaker 4: far apart.
Speaker 5: So the Biden campaign has ninety six million dollars. The
Speaker 5: Trump campaign has one hundred and twenty eight million dollars.
Speaker 4: So Trump is ahead not a massive amount.
Speaker 5: The thing that's the real differentiator here is that Biden's
Speaker 5: fundraising has totally fallen off a cliff. The other thing
Speaker 5: is just how much they're spending.
Speaker 4: In the month of June.
Speaker 5: This is even you know, before a lot of the
Speaker 5: debate stuff started percolating, Democrats spent ninety three percent of
Speaker 5: the money that they brought in compared to Trump, who
Speaker 5: was spending less than half.
Speaker 4: So just the burn rate, there is a massive difference.
Speaker 3: The Trump forces have been spending next to nothing. They
Speaker 3: have a superpack that's spent money in Pennsylvania, Georgia and
Speaker 3: now has just gone into Arizona. But they've been marshaling
Speaker 3: their resources, really sort of hoarding their cash while buy
Speaker 3: has gotten out early. All that money now, I don't
Speaker 3: want to say it's wasted money because it helped perhaps
Speaker 3: the Democratic brand, but it was money that was spent
Speaker 3: to promote Biden. And now Democrats have to figure out
Speaker 3: a new branding, a new message now that the nominee
Speaker 3: will be somebody else.
Speaker 2: And Laura, how is the Trump camp reacting to this news.
Speaker 5: There's a couple of different schools of thought within the
Speaker 5: Trump campaign. Just last night, he had a rally in
Speaker 5: Michigan where he talked about some of the disarray that
Speaker 5: was happening with Democrats. Of course, this was before Biden
Speaker 5: announced that he would be dropping out.
Speaker 4: But Trump, at the top of his.
Speaker 5: Rally essentially like pulled the crowd and said, you know, basically,
Speaker 5: who do you want to be? You know, our opponent.
Speaker 5: Do you want it to be Joe Biden? Do you
Speaker 5: want it to be Kamala Harris? And so the crowd overwhelmingly,
Speaker 5: by a show of voices, indicated that they wanted Biden
Speaker 5: to be the nominee. You know, a clear sign that
Speaker 5: at least, you know, Trump supporters think that he is
Speaker 5: an easier candidate to be. However, we know that the
Speaker 5: Trump campaign for weeks has been preparing that it may
Speaker 5: be Kamala or it may be someone else in the
Speaker 5: race that they're running against.
Speaker 4: So they've started working on message.
Speaker 2: What are we hearing about how Democratic donors are reacting
Speaker 2: to Biden's announcement and whether they'll rally behind Kamala Harris
Speaker 2: versus someone else.
Speaker 4: So there's really two camps of donors right now.
Speaker 5: One some of the major donors who are coming out
Speaker 5: and saying, look, we support Harris.
Speaker 4: These are folks like George Soros and his.
Speaker 5: Son Alexander Soros, saying we're going to support Harris and
Speaker 5: you know what she needs to run. There's another group
Speaker 5: of donors. I'll note that these are less major donors.
Speaker 5: These are people who give maybe up to a million
Speaker 5: dollars but still have an influential voice within the party
Speaker 5: and are very vocal, and they're saying, hold on a second,
Speaker 5: we want to make sure there's some sort of open
Speaker 5: nominating process. We want to have either a primary or
Speaker 5: an open convention. And this is going to be a
Speaker 5: debate that plays out over the next couple of days
Speaker 5: and whether those loud, vocal voices saying they want some
Speaker 5: sort of way to choose the nominee versus have it
Speaker 5: just going to Harris automatically. If they went out, this
Speaker 5: could be very messy and you could have a lot
Speaker 5: of different candidates rise to the foe, you know, each
Speaker 5: siphoning off a little bit of donor money, but not
Speaker 5: having donors unite behind candidate. This is the exact problem
Speaker 5: that Republicans had on their side of after twenty twenty two.
Speaker 5: The major party donor said, we don't want to have
Speaker 5: Trump as our nominee. We should all pick a candidate
Speaker 5: and give to that candidate, and we could defeat Trump.
Speaker 4: That never happened. First looked like it might.
Speaker 5: Be DeSantis, then maybe Nikki Haley, but Trump at that
Speaker 5: point was too powerful and had enough support within the
Speaker 5: party base. A similar thing could happen with Harris if
Speaker 5: the donors don't decide and that it is clear that
Speaker 5: the party leadership and the base of the party is
Speaker 5: moving with Harris. She could be the nominee and donors
Speaker 5: are going to have to line behind because they just
Speaker 5: won't have any options at that point.
Speaker 2: After the break, we dig into what an open convention
Speaker 2: could look like and the financial problems that could face
Speaker 2: the eventual nominee, including how much money a new candidate
Speaker 2: would need to launch a successful campaign in under four months.
Speaker 2: We're back. I've been talking with White House and Politics
Speaker 2: reporter Gregory Cordy and Money and Politics editor Davison about
Speaker 2: what we currently know about President Biden's decision to drop
Speaker 2: out of the twenty twenty four race, but what comes next.
Speaker 2: The open convention scenario sounds chaotic, perhaps, but could any
Speaker 2: of this upheaval actually energized donors. Could donors who have
Speaker 2: thus far sat on the sidelines, get activated to actually
Speaker 2: start donating more to the Democratic Party.
Speaker 5: That's the argument that some of these donors make and say, look,
Speaker 5: you know, they're particularly arguing for a more moderate candidate.
Speaker 5: Have someone who's maybe a little bit more business friendly,
Speaker 5: Have someone who appeals to some of those people who
Speaker 5: are never Trumpers on the Republican side. You could bring
Speaker 5: a lot of money in right now, that's all theoretical.
Speaker 5: There's no one who's coming forth and saying, look, I'm
Speaker 5: going to pledge you know, X million dollars if it
Speaker 5: is a certain candidate. Everyone is sort of seeing where
Speaker 5: the political winds are blowing, and just the way that
Speaker 5: the calendar moves.
Speaker 4: These decisions have to be made soon.
Speaker 5: This is not something that can play out over a
Speaker 5: couple weeks or months. You know, it's almost a first
Speaker 5: mover advantage here.
Speaker 3: Of games that modern campaigns play is that they try
Speaker 3: to raise a lot of money around events to kind
Speaker 3: of signal that they have the momentum. So I would
Speaker 3: expect the Harris campaign, now that there is one, to
Speaker 3: come out in the next few days and give us
Speaker 3: a total of exactly how many millions of dollars she's
Speaker 3: raised in a very short period of time to kind
Speaker 3: of give the impression that there's a snowball effect, that
Speaker 3: people are rallying around her campaign, that she does have
Speaker 3: the ability to raise that small dollar donor, and sometimes
Speaker 3: small dollar donors follow small dollar donors. If people see
Speaker 3: that there is momentum behind a candidate, that might encourage
Speaker 3: even more people to jump in.
Speaker 2: Already, we're seeing that tactic in action. As of nine
Speaker 2: pm Eastern on Sunday night, the Democratic fundraising platform Act
Speaker 2: Blue announced it received over forty six million dollars in
Speaker 2: donations from small dollar donors just since Biden officially endorsed Harris. Laura.
Speaker 2: Supporters of Harris have been saying that one of her
Speaker 2: biggest assets is her access to Biden's wartch that ninety
Speaker 2: six million dollars we were talking about earlier. How does
Speaker 2: the process work now? Does the Harris campaign inherit all
Speaker 2: that money automatically or could it go to another nominee
Speaker 2: If it.
Speaker 5: Is Harris as the nominee, Yes, she would be able
Speaker 5: to inherit the ninety six million dollars or so that
Speaker 5: is left in the account. She's able to operate a
Speaker 5: lot more seamlessly than if it's another candidate, so she
Speaker 5: is able to keep on staff, people could keep their
Speaker 5: email addresses. If in fact it is another candidate, they
Speaker 5: have to start a campaign committee, essentially the thing you
Speaker 5: file with the FEC to say hey, I'm running for president.
Speaker 5: They have to start a brand new campaign. That campaign
Speaker 5: will have zero dollars in it. The ninety six million
Speaker 5: that's left in the Biden campaign. They can either donate
Speaker 5: that to the Democratic National Committee or to a super pac,
Speaker 5: which presumably would then go to support that new candidate ultimately,
Speaker 5: but you know, at least in their campaign account, they'll
Speaker 5: have zero dollars, so they'll immediately have to start fundraising.
Speaker 5: There are a bunch of fundraising limitations, so for just
Speaker 5: an individual donor, the most they could give to that
Speaker 5: campaign is just a couple thousand dollars, so that you've
Speaker 5: got to go out and bring in a lot of money.
Speaker 5: You need to bring in a lot of grassroots money.
Speaker 5: You would need to have all of the super PACs
Speaker 5: working with you. Imagine a startup. This is what the
Speaker 5: campaign would be doing of just you know, getting staff hired,
Speaker 5: getting office space, doing all of.
Speaker 4: These things, and it would take them weeks to just
Speaker 4: get up on the.
Speaker 5: Ground and running you know stuff that the campaign when
Speaker 5: a normal year would have been doing you know, a
Speaker 5: year or even two years ago.
Speaker 2: How much money will they need to run an effective
Speaker 2: campaign over the next few months.
Speaker 5: So Biden and his team you know and kind of
Speaker 5: allies we're talking about that they need at least a billion,
Speaker 5: if not more to run this campaign. Biden and his
Speaker 5: you know, allies raised about a billion dollars in twenty twenty.
Speaker 5: So far the Biden campaign you know, to date, and
Speaker 5: you know, along with the DNC, you know, has spent just.
Speaker 4: A little bit over three hundred and fifty million dollars.
Speaker 5: But of course the spending really really ramps up, you know,
Speaker 5: as you head into election day. The Democrats have created
Speaker 5: a strategy that's pretty expensive.
Speaker 4: They have a lot of field offices with a lot
Speaker 4: of staff.
Speaker 5: They are running a lot of advertising, you know, tens
Speaker 5: of millions of dollars you know, in any given month
Speaker 5: or week. They're going to need a lot of money
Speaker 5: if they're going to continue the strategy. And because they're
Speaker 5: going to be introducing a new candidate and a new
Speaker 5: vice presidential candidate to the public, they're going to need
Speaker 5: to continue that money.
Speaker 2: Bloomberg has reported that Harris has been having meetings with
Speaker 2: Wall Street executives recently, and from her days in California politics,
Speaker 2: she has her own ties to Silicon Valley and the
Speaker 2: tech industry. How might to leverage those relationships.
Speaker 5: Harris is very lucky because she comes from California, which
Speaker 5: is called a donor state in that you know, it's
Speaker 5: California really funds democratic runs across the country, So she
Speaker 5: has close ties to Silicon Valley. She is a known
Speaker 5: entity there, people know her name. Being vice president. She's
Speaker 5: also been able to operate a little bit more under
Speaker 5: the radar than Biden. So she's been taking these meetings
Speaker 5: with folks on Wall Street to explain some of the
Speaker 5: Biden policies.
Speaker 4: She started to build those relationships.
Speaker 5: You know, remember she's only fifty nine years old, so
Speaker 5: she's always had an eye to what she would do
Speaker 5: after she was Biden's vice president, knowing that she needs
Speaker 5: to have Wall Street support, She needs to have some
Speaker 5: of these ties to the business community.
Speaker 3: At least among some of the Wall Street donors. He
Speaker 3: is an ideological divide here that Harris is perceived as
Speaker 3: perhaps to the left of Biden when she ran in
Speaker 3: twenty twenty, there was a concerted effort among some Democratic
Speaker 3: donors to find a more moderate candidate. Remember, Bernie Sanders
Speaker 3: was in that race, Elizabeth Warren and Kamala Harris was
Speaker 3: somewhere on the spectrum between Biden and those more liberal candidates,
Speaker 3: probably a little bit more towards the progressive side. She
Speaker 3: was for Medicare for all, for example. She was for
Speaker 3: a number of different policies that she's now had to
Speaker 3: subsume Biden's policies as his vice president. But there might
Speaker 3: be some concern from some Wall Street donors of what
Speaker 3: they're going to get in a future Harris administration.
Speaker 2: In recent weeks, new packs have popped up that are
Speaker 2: open about fundraising for a non Biden candidate. Do we
Speaker 2: know how much money those packs have raised?
Speaker 4: At this point, we.
Speaker 5: Don't know exactly how much money is in them, because
Speaker 5: they've just sprung up in the past couple of days
Speaker 5: or weeks. The the ones Mike Novagrats of Galaxy Digital
Speaker 5: his pack this is a couple weeks old now at
Speaker 5: this point, but said it raised about two million dollars
Speaker 5: in the initial days after forming. In the next twenty
Speaker 5: four to forty eight hours. I anticipate we'll see a
Speaker 5: lot of donors come forward, either with actual money or
Speaker 5: with commitments to give to whether it's Vice President Harris
Speaker 5: or another candidate, should someone else throw their hat in
Speaker 5: the ring, and that will be a key determiner of
Speaker 5: who really has the juice to mount to run here, as.
Speaker 2: We've been talking about, a Harris candidacy is not a
Speaker 2: foregone conclusion. Despite Biden's announcement that he will endorse her.
Speaker 2: The Democratic National Convention is in one month. Is there
Speaker 2: still a chance that Democrats might choose someone besides Harris
Speaker 2: at the convention?
Speaker 3: Gregory, That's absolutely possible under the convention rules, But practically speaking,
Speaker 3: it seems to me that any other candidate would have
Speaker 3: to get out there relatively quickly before the institutional Democratic
Speaker 3: Party really rallies around Harris. We're already seeing endorsements from
Speaker 3: former President Bill Clinton and Hillary Clinton. We're starting to
Speaker 3: see the Congressional Black Caucus and other really important stakeholders
Speaker 3: rally around Harris. She has important support from important constituencies
Speaker 3: in the Democratic Party, and so it would take a
Speaker 3: lot for somebody to dislodge her from that perch, and
Speaker 3: somebody's going to have to come in with a pretty
Speaker 3: aggressive campaign and a lot of money pretty soon to
Speaker 3: signal that this is going to be an open process.
Speaker 3: Otherwise I would expect Democrats to really circle dragons around Harris.
Speaker 2: Assuming Harris gets the nomination, what is the process for
Speaker 2: Harris to choose her running mate and how much you
Speaker 2: try to leverage that decision to bring in additional funding.
Speaker 3: We saw this on the Republican side just this past
Speaker 3: week when Donald Trump chose JD Vance as his running mate,
Speaker 3: and he did so really at almost a last possible
Speaker 3: moment before the roll call even happened, So there is
Speaker 3: time for that to happen. We might expect for Harris
Speaker 3: to wait until close to the convention when it's cleared
Speaker 3: that she has the votes, although she could come up
Speaker 3: with a ticket earlier than that, to kind of try
Speaker 3: to figure out how to unify the party, maybe pick
Speaker 3: somebody from a different wing of the party, maybe a governor.
Speaker 3: Andy Basheer, the governor of Kentucky's name has come up.
Speaker 3: The governors from Michigan and Maryland and Pennsylvania and California,
Speaker 3: all of whom could be potential running mates. One potential
Speaker 3: path would be dislect as a running mate somebody who
Speaker 3: is already independently wealthy and can write the campaign a
Speaker 3: big check. You can self fund your campaign, it's not
Speaker 3: subject to limits. And one name that could come into
Speaker 3: play in that kind of a scenario is JB. Pritzker,
Speaker 3: the governor of Illinois, who is independently wealthy, is a billionaire,
Speaker 3: inherited a lot of money from his family's hotel and
Speaker 3: real estate empire, worked in venture capital, and was very
Speaker 3: influential in getting the convention to come to Chicago in
Speaker 3: his home state by helping to support that effort monetary,
Speaker 3: and could do the same if he were on the ticket.
Speaker 2: For more on the political fallout from Biden's decision, the
Speaker 2: market reaction, and the next steps for the Harris campaign,
Speaker 2: head to Bloomberg dot com. Thanks for listening to The
Speaker 2: Big Take podcast from Bloomberg News. I'm Sarah Holder. This
Speaker 2: episode was produced by Julia Press. It was mixed by
Speaker 2: Alex Sugiura and fact checked by Adrianna Tapia. Naomi Shaven
Speaker 2: is a senior producer and edited this episode. Our senior
Speaker 2: editor is Elizabeth Ponso. Nicole Beemsterbor is our executive producer
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