| | | | | |  | | By Ben White and Aubree Eliza Weaver | Editor's Note: Morning Money is a free version of POLITICO Pro Financial Services' morning newsletter, which is delivered to our subscribers each morning at 6 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day's biggest stories. Act on the news with POLITICO Pro. Programming note: Morning Money will not publish from Thursday, Dec. 24, through Friday, Jan. 1. We'll be back on our normal schedule on Monday, Jan. 4. | | | Trump threatens to blow everything up (again) — Just when we all thought we could pack up and slide into a desperately needed Christmas break, President Donald Trump, as he is wont to do, tossed a grenade into the Covid relief bill by posting a video on Facebook calling the $900B package passed by both houses of Congress a "disgrace." Trump called for $2000 checks for individuals and $4000 for families and ripped foreign aid and other non-Covid related items in the giant year end package that also funds the government at $1.4 trillion through next September. He didn't expressly threaten to veto the bill. But he certainly hinted that he might. Who knows what he will do? This is the world we live in now in the waning days of the Trump era. The president is enormously angry over losing the election and casting around for people to attack and blame. And some of his Tuesday rant was clearly, though not overtly, directed at Senate Majority Leader Mitch McConnell who acknowledged Joe Biden as the president-elect and helped shepherd the Covid relief package that cleared both houses with overwhelming support. House Speaker Nancy Pelosi tweeted in response: "Republicans repeatedly refused to say what amount the President wanted for direct checks. At last, the President has agreed to $2,000 — Democrats are ready to bring this to the Floor this week by unanimous consent. Let's do it!" And they are expected to do it on Christmas Eve but Republicans probably won't support it. The current bill is the proverbial last train leaving the station. Trump could back off. Or he could veto it and get overridden. But he has injected yet more uncertainty into the process. And he could have slammed through $2000 checks over the summer with little problem and possibly boosted his reelection process along the way. He did not do so. Risks reemerge — RSM's Joe Brusuelas: "[T]here is now a significant risk of a government shutdown on December 28, 2020. The opposition is not just about the fiscal aid package, but about grievances over the composition of the $1.4 trillion budget package. Such a shutdown would disturb consumer and corporate confidence as well as an upset in financial markets at a time when the nascent global economic recovery is quite fragile and still in crisis." GOOD WEDNESDAY MORNING — This is the final Morning Money of 2020. What a rough year for everyone. Thanks for allowing us into your inbox. We did our best though we know some have complaints that we did too much of this or too little of that. Management listens to all this feedback and we aim to serve you even better in 2021 if you would be so kind as to forgive any of our failings in 2020, especially in these grueling final days. Love and peace to all of you. Email me on bwhite@politico.com and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver on aweaver@politico.com and follow her on Twitter @AubreeEWeaver. | | | Should be interesting on Wall Street where futures turned just slightly lower after Trump's threats on the omnibus spending/Covid relief bill. So far investors don't seem to buy that it's real. And it may not be. But, once again, who knows? … Initial jobless claims at 8:30 a.m. expected to be largely unchanged at a hugely elevated 880K FED SURVIVES BUT FIGHTS REMAIN AHEAD — Our Victoria Guida: "The Federal Reserve has lived to fight another day after its starring role in the economic relief negotiations. But its battle could get harder in the coming year. "A legislative compromise between Senate Minority Leader Chuck Schumer and Sen. Pat Toomey (R-Pa.) will limit the Fed's ability to aid businesses, states and cities through emergency lending. In the short run, the deal heads off a political headache … But it's also a preview of the kind of scrutiny the Fed could face from Republicans going forward, particularly if Toomey takes the helm of the Senate Banking Committee, as the central bank looks for further ways to boost the economy." TRUMP'S LAST STAND — Our Kyle Cheney, Gabby Orr, and Marianne LeVine: "Trump is plotting a final stand in Congress on Jan. 6, casting it as the ultimate loyalty test in his quest to remain in power and shutting out anyone who won't get in line. "Trump has been strategizing in recent days with a band of his fiercest congressional supporters about the effort, which will involve lodging objections during the typically pro forma congressional certification … Biden's victory. It's a gambit that even Republican leaders and those around Trump concede is doomed to fail, given the makeup of Congress." IF THE COVID BILL ACTUALLY GETS THROUGH … Via Moody's "While the legislation does not change our forecast of 4.2% GDP growth in 2021, it does offset downside risks by supporting households and small businesses through extended unemployment benefit expansion and PPP loans, among other measures." SMALL BUSINESS AID TO RESTART BY JAN. 1 (MAYBE) — Our Zachary Warmbrodt: "The Trump administration should be ready to begin issuing a new wave of payroll support loans to small businesses by the beginning of the year, a key lawmaker said … suggesting Capitol Hill will press for an aggressive rollout after passing a massive relief bill this week. "In a call with reporters, Sen. Ben Cardin of Maryland, the top Democrat on the Senate Small Business Committee, said he believed the window for so-called Paycheck Protection Program loans should reopen within a matter of days 'because that process is understood.' The program, which offers loans that can be forgiven if businesses maintain their payroll, issued $525 billion in aid before lending closed in August. In the new economic rescue package, Congress is giving it another $284 billion to restart." TRUMP'S PARDON BINGE — Our Kyle Cheney and Josh Gerstein: "Trump issued a raft of pre-Christmas pardons and commutations … favoring the well-connected and those with A-list advocates, while appearing to shunt aside — at least for now — more than 14,000 people who have applied for clemency through a small Justice Department office that handles such requests. "Some of Trump's actions seemed intended to send clear messages, such as grants of clemency for the former campaign operative whose 2016 activities triggered the FBI probe that led to Special Counsel Robert Mueller's investigation and to four security contractors convicted for massacring Iraqi civilians in 2008, including one serving a life-sentence for first-degree murder." | | | | TUNE IN TO NEW EPISODE OF GLOBAL TRANSLATIONS: Our Global Translations podcast, presented by Citi, examines the long-term costs of the short-term thinking that drives many political and business decisions. The world has long been beset by big problems that defy political boundaries, and these issues have exploded over the past year amid a global pandemic. This podcast helps to identify and understand the impediments to smart policymaking. Subscribe for Season Two, available now. | | | | | | | | S&P 500 ENDS LOWER — Reuters' Stephen Culp: "The S&P 500 lost ground at the end of a whipsaw session on Tuesday as concerns over a new variant of the coronavirus and disappointing economic data stole the thunder from Washington's passage of a long-awaited pandemic relief bill. The Dow also closed lower, while Apple Inc helped fuel the tech-heavy Nasdaq's advance." THE SOARING STOCK INDEX YOU'VE NEVER HEARD OF — WSJ's Michael Wursthorn: "A lesser-known stock index lost its biggest driver after Tesla Inc. joined the S&P 500, potentially undercutting the performance of the highflying benchmark and several exchange-traded funds that track it. "The S&P Completion Index tracks all U.S. stocks except those in the S&P 500. The index is typically associated with mid, small and microcap stocks that fail to meet certain criteria for inclusion in the S&P 500. The presence of Tesla, the biggest stock in the completion index and the sixth-largest publicly traded company in the U.S., was something of an anomaly." | | | STIMULUS DEAL LIKELY TO SPUR FASTER ECONOMIC GROWTH LATER NEXT YEAR — WSJ's Paul Kiernan: "The coronavirus-relief bill passed by Congress on Monday will likely spur a stronger economic recovery in the second half of 2021, though it may be arriving too late to stave off a further slowdown this winter, analysts say. "Economists nudged up their 2021 economic-growth forecasts to reflect the roughly $900 billion aid package, which includes aid to households, unemployed workers and small businesses battered by the pandemic. Capital Economics now sees U.S. gross domestic product expanding 5.5 percent next year, up from a previous forecast of 5 percent growth. FACTORIES, HEALTH CARE FUELED ECONOMY'S THIRD-QUARTER SURGE — Bloomberg's Katia Dmitrieva: "The record U.S. economic rebound in the third quarter was led by manufacturing, health care and restaurants, indicating such industries benefited most from reopenings after the initial pandemic lockdowns. "Gross domestic product increased 7.5 percent from the prior period, or at an annualized rate of 33.4 percent, revised from 33.1 percent, according to the Commerce Department's third estimate released Tuesday. Personal spending, which makes up about two-thirds of GDP, rose at an upwardly revised 41 percent pace." AS SMALL BUSINESSES AWAIT NEW AID, IT'S TOO LATE FOR SOME — AP's Joyce M. Rosenberg and Paul Wiseman: "America's entrepreneurs welcomed the long-delayed relief package, which provides $325 billion in aid to small companies and makes it easier for them to gain access to grants and loans under the Paycheck Protection Program. "But the rescue comes too late for tens of thousands of businesses that have already closed, a consequence of a pandemic that has kept away diners, shoppers and customers since early spring. The National Restaurant Association estimates that 110,000 U.S. restaurants — 17 percent — have shut down indefinitely or for good, doomed by restrictions on their hours or capacity and by Americans' reluctance to eat out." TRUMP'S LONGTIME BANKER AT DEUTSCHE BANK RESIGNS — NYT's David Enrich: "President Trump's longtime banker at Deutsche Bank, who arranged for the German lender to make hundreds of millions of dollars of loans to his company, is stepping down from the bank. Rosemary Vrablic, a managing director and senior banker in Deutsche Bank's wealth management division, recently handed in her resignation, which the bank accepted, according to a bank spokesman, Daniel Hunter." | | | | A NEW YEAR, A NEW HUDDLE: Huddle, our daily must-read in congressional offices, will have a new author in 2021! Olivia Beavers will take the reins on Jan. 4, and she has some big plans in store. Don't miss out, subscribe to our Huddle newsletter, the essential guide to all things Capitol Hill. Subscribe today. | | | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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