Morning news brief
DWANE BROWN, HOST:
Republicans in New York who know George Santos now describe him as a pathological liar. They say the new congressman should resign immediately.
LEILA FADEL, HOST:
GOP leaders on Long Island held a news conference yesterday to condemn Santos. But House Speaker Kevin McCarthy says he should remain in office.
BROWN: Yes. NPR's Brian Mann has been following this strange but true story, and he joins us now. Brian, what did specifically Republicans in Santos' district in New York say?
BRIAN MANN, BYLINE: Yeah, they voiced disgust and dismay, Dwane, at his behavior. They demanded that Santos leave office immediately. Remember, this is a guy who lied about his education, his career, his family escaping the Holocaust, about his employees dying in the Pulse nightclub shooting.
MANN: So Republican after Republicans stood up and said they had personal conversations where Santos lied to them in private as well, spinning all these tales that turned out to be false.
BROWN: At this point, I'm wondering what Republicans can do, if anything, about that.
MANN: Yeah, not much. Kevin McCarthy now says he'll leave it to voters in two years to cast judgment on Santos. So these local Republicans are kind of stuck. And what they do say is they won't work with Santos. They won't help him politically. And if he runs for reelection, they'll keep their distance. Jack Martins, a Republican state senator from Long Island, described Santos as a pariah.
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JACK MARTINS: Probably impossible to shame the shameless. It is probably impossible for us to get someone who has no shame to do what is right. But here we stand, united in sending a message that until he is removed, by one way or another, we will move forward, we will continue to perform our services and our responsibilities, but it will not include Santos.
MANN: And I should say, Dwane, four House Republicans from New York, including the statewide party chair, Congressman Nick Langworthy, have also called for Santos to step down.
BROWN: What has been his response so far?
MANN: Yeah, he's been defiant. He has declined NPR's repeated requests for an interview. But yesterday, when reporters caught up with him in a hallway in the Capitol and asked whether he will step down, he answered - and I'm quoting here - "I will not." On Twitter, he was even more sort of defiant, saying that he was elected to serve the people, not the party or politicians.
BROWN: Wow. Now, it's a funny or a very stark contrast - Republicans in New York are on a different page than, say, Republicans on the Hill in Washington, right?
MANN: Yeah, that's right. And there are some reasons for that. In New York, the GOP looked strong in the midterm elections. This is a Republican Party on the rise, and they clearly want to distance themselves from Santos. They see him as a liability. They don't want to lose House seats in 2024 because of him.
BROWN: There it is.
MANN: But in Washington right now, Santos is a crucial vote. Remember, his support helped Congressman Kevin McCarthy win the speaker's gavel. He's expected to be a key vote going forward.
BROWN: And quickly, Brian - so Santos might stay put for now?
MANN: Yeah, that's right. There are two probes underway already into his deceptions, focusing in part on his campaign contributions. If Santos were somehow to be forced from office, it would trigger a special election in this really competitive district at a time when the GOP's House majority is super fragile.
BROWN: NPR's Brian Mann. Thank you.
MANN: Thank you.
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BROWN: From trouble in Congress to trouble in the skies, the U.S. aviation sector is slowly returning to normal this morning after a computer outage caused disruptions nationwide.
FADEL: Yeah, the Federal Aviation Administration grounded all U.S. departing flights yesterday morning for 90 minutes so the issue could be fixed. The outage of a pre-flight safety notification system called NOTAM forced airlines to cancel more than 1,300 flights and delay nearly 10,000 more. The FAA says it's investigating what happened. Secretary of Transportation Pete Buttigieg called it another challenging day for U.S. aviation.
BROWN: Oh, yeah. In fact, to learn more about what happened, we're joined by reporter Leslie Josephs. She covers airlines for CNBC. Leslie, I'm sure folks who aren't flying this week are happy. Have authorities discovered what caused the system to go down?
LESLIE JOSEPHS: They do have a rough idea of what caused it, and it's linked back to this corrupted database file that appeared to be getting uploaded, and then they thought the issue was fixed. All this goes back to Tuesday afternoon, you know, more than 12 hours before passengers started to really feel the impact. They thought it was fixed. Then they had to go back. They realized they had the same problem. And then they essentially decided to pull the plug and start the system over again.
BROWN: And this is quite an old system, right? It goes back to the '50s?
JOSEPHS: It does. I mean, they are in the process of modernizing it. The issue is with this bad file. I mean, if you've ever tried to attach something to an email that, you know, maybe it was a corrupted file, and you just kept hitting the same wall, and the person receiving the email wasn't able to open it.
JOSEPHS: Their backup system was getting the same bad data. That's what we've heard. So they were unable to address it. And, you know, this is one of those cases where redundancy didn't help them at all.
BROWN: Yeah. Have we ever seen a tech error like this before?
JOSEPHS: I certainly haven't in my five years on the beat, talked to pilots who said they've never seen it in decades. So it is very, very unusual. It's also unusual what the FAA did, which was essentially shut down the air system, prevent any planes from taking off. Usually you see this in, you know, pockets when there's bad weather or, you know, one airline has their own IT outage, and they want to slow down their arrivals. So this is extremely unusual. Like you said, it only lasted about 90 minutes, but the residual delay - you know, a lot of these planes had nowhere to park. So this lasted all day. About 10,000 flights in total were delayed yesterday.
BROWN: My goodness. More of a inconvenience issue than a safety issue because no planes took off. But we do recall Southwest and its big meltdown over the holidays. Now, do these two events suggest maybe a bigger problem within aviation technology?
JOSEPHS: Well, the technology that underpins the aviation system - and we have the most complex and busiest air system in the world.
JOSEPHS: It is old, and it does need to be updated. It's just hard to update it. You need funding for the FAA, of course. You know, they need more money. They need more people to do that. Certainly, the same thing with airlines. But it takes a long time. It's not something that you could, you know, just download a new OS, and there you are. So, you know, FAA - it's also a political issue, and it's a big question of funding. You know, Southwest is dealing with their own issues, different platforms. But again, this - these issues seem to (inaudible) again and again.
BROWN: Yeah. Leslie Josephs, thank you for joining us. She's an airline reporter for CNBC.
JOSEPHS: My pleasure.
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BROWN: Well, so far, 2023 has been tough for employees at some major U.S. companies. Amazon, Salesforce and McDonald's have all announced layoffs this year. Now the pain is spreading to workers at one of Wall Street's biggest banks.
FADEL: Yeah, financial giant Goldman Sachs says it could lay off more than 3,000 people this week. It's the latest sign of trouble in the economy.
BROWN: Wow. NPR's David Gura joins us now to explain a little more about this. David, how are you, buddy?
DAVID GURA, BYLINE: I'm good. How are you?
BROWN: I'm doing well. What do these layoffs tell us about, say, the bigger economic troubles ahead?
GURA: Well, Dwane, this is a huge warning sign, given how integral big banks like Goldman Sachs are to the entire economy. You know, right now there's a lot of uncertainty. There's less confidence. And as a result of that, there have been fewer takeover deals. Companies have held off going public. Instacart's long anticipated IPO, for instance, is yet to happen. When corporate clients decide to sit on the sidelines, that really hurts the bottom line at banks like Goldman. Its bread and butter is investment banking, so it's been hit harder by this downturn than many of its rivals. Dwane, last year, Goldman Sachs' share price fell by more than 10%. I'll note that was better than the S&P 500. That index ended 2022 more than 19% lower. But it was definitely not a banner year for the big banks, including Goldman Sachs.
BROWN: Wow. Yeah, you said Goldman Sachs hit more so than its competitors. Now, the bank's biggest round of layoffs since - what? - 2008? Are there other factors that Goldman Sachs particularly may be vulnerable to?
GURA: Yeah, another reason is this bank is not as diversified as many of its rivals. Goldman Sachs does not have the kind of retail presence that JPMorgan Chase has or that Bank of America has. During the firm's century-and-a-half-long history, consumer banking just hasn't been Goldman's thing. I'm sure you've noticed, Dwane, you don't see Goldman Sachs branches or Goldman Sachs ATMs.
GURA: Well, the bank has been trying to change that in recent years with a retail banking business called Marcus, offering loans and savings accounts. Maybe you've heard of Goldman's credit card venture with Apple. But the bank has had a tough go of it. Competition for customers is fierce, and Goldman is going up against rivals that have been at this a lot longer. So this is something else that's led to these layoffs. And I'll add, it's unclear how committed Goldman is to its retail banking business going forward. And just last week, the executive in charge of it announced that she's leaving the firm.
BROWN: Well, David, we've heard from other companies, of course, that they're also course correcting after the pandemic. To what extent do you think that's driving job cuts on Wall Street these days?
GURA: Yeah, Goldman Sachs and other financial firms did add to their head counts during the pandemic, which was an unexpected boom time for banks. Not only did they expand, they also decided not to lay off workers who didn't meet performance targets. They hit pause on annual layoffs. Well, those have started up again, and that has contributed to these job cuts at Goldman. Chris Kotowski is an analyst with Oppenheimer and Company who reminds us that banking is a business with a lot of ups and downs.
CHRIS KOTOWSKI: It's pretty volatile to begin with, and that's kind of what you sign up for when you go to work on Wall Street.
GURA: So in other words, you're paid well on Wall Street, but if you don't make the grade, you're let go.
BROWN: So are we expecting more layoffs in banking?
GURA: Well, it's certainly not out of the question, and chances are we'll hear about cost cutting tomorrow, when a number of big banks tell Wall Street how they did in the last quarter. The heads of these firms see all kinds of data on spending habits, on loans and credit cards and trading, which informs their outlook. Now, Goldman is not forecasting a recession in 2023, although most other banks are. I'd say overall the expectation is that for Wall Street, this is going to be another challenging year.
BROWN: NPR's David Gura. Thanks.
GURA: Thank you. Transcript provided by NPR, Copyright NPR.