| | | | | |  | | By Ben White and Aubree Eliza Weaver | Presented by |  | | | 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. | | | Biden's big economic dreams rest on Georgia — I write this morning about the giant stakes today for President-elect Joe Biden in the pair of Senate runoffs in Georgia. If Democrats take them both — a real possibility — he will be able to enact at least some of his agenda on Covid-19 relief and tax hikes on the wealthy and corporations. If Republicans hold at least one, he will be in for a long, hard slog with a Mitch McConnell-led Senate. One Biden adviser described the stakes as "ginormous." Biden will take office later this month with bold plans to fight growing economic inequality. … Two of the most powerful ways to fight inequality involve distributing aid and overhauling the tax code, policy levers that require flipping the Senate to Democratic control. Biden, who made economic justice a centerpiece of his presidential campaign, will face a wage and wealth gap made significantly worse by the Covid-19 pandemic. The coronavirus lockdowns hit lower-income workers, including communities of color and women, much harder than wealthier Americans. Biden is going to have a tough time, his closest economic advisers say, without a Democratic Senate able to make major changes to policies around taxation and spending. People close to Biden put the stakes in stark terms in private conversations with one noting that failing to win the Senate would mean Biden would take office with massive weights draped around his shoulders. With the narrowest of margins in the Senate even with two Georgia wins , Biden's advisers know some of their boldest plans on taxes and spending will still have a tough time getting through. "Without the Senate, Biden would have to try cutting deals with Senate Majority Leader Mitch McConnell, perhaps including increasing the Earned Income Tax Credit (EITC) and making child tax credits more generous. Even such relatively small-bore deals are not guaranteed despite support from some Republicans. Predict the market reaction — MM has no idea how the two Georgia races will play out. Or how Wall Street will react to the results (which we may or may not know by Wednesday morning.) What do you think? Will Wall Street rally on a Democratic sweep on hopes for much more fiscal stimulus? Or tank on fear of higher taxes and more regulation? Or perhaps do both in the same day? Let us know your call on bwhite@politico.com. GOOD TUESDAY MORNING — Happy Georgia runoff day! 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. | | A message from Blackstone: Blackstone partners with businesses through tough times: Amid periods of economic uncertainty and difficult market conditions, Blackstone consistently supports the companies in which we invest to help position them for long-term growth. | | | | | | DEPRESSING STORY OF THE DAY — Ohio Capital Journal's Marty Schladen: "As the coronavirus vaccine dribbles out far more slowly than promised, many of the people who can get it are refusing to do so. Gov. Mike DeWine … said that a whopping 60% of nursing home workers who have been offered the vaccine have refused it. "The news comes amid disappointing vaccination numbers across Ohio, which was told by the Trump administration that it would receive more than 530,000 doses of the vaccines by the end of December. Just 94,000 so far have been administered." And from our amazing POLITICO Nightly colleagues : "Simple logistics slowed down the Covid vaccine rollout — and put the pandemic's end further out of reach. Too few states have figured out how to get vaccine doses into the arms of people who need them and want them the most. "The CDC has distributed more than 15 million first doses so far, but only 4.5 million people have received the first half of the two-shot cocktail, according to the agency, far short of … Trump's goal of vaccinating 20 million people by the end of 2020. At least 1 million Americans need to be vaccinated every day in order for the pandemic to end by Sept. 1." REST IN PEACE, TOMMY — An absolutely gutting and heartbreaking post via Medium from Rep. Jamie Raskin (D-Md.), who is married to former deputy Treasury secretary and former Fed governor Sarah Bloom Raskin on the death by suicide of their son Thomas "Tommy" Raskin: "He began to be tortured later in his 20s by a blindingly painful and merciless 'disease called depression' … "He left us this farewell note on New Year's Eve day: 'Please forgive me. My illness won today. Please look after each other, the animals, and the global poor for me. All my love, Tommy.'" | | | | GET THE BIG PRE-INAUGURATION SCOOPS IN TRANSITION PLAYBOOK: Inauguration Day is quickly approaching. Is the Biden administration ready? Transition Playbook brings you inside the transition and newly forming administration, tracking the latest from Biden world and the transition of power. Written for political insiders, this scoop-filled newsletter breaks big news and analyzes the appointments, people and emerging power centers of the new administration. Track the transition and the first 100 days of the incoming Biden administration. Subscribe today. | | | | | GOLDMAN ON GEORGIA — Via Goldman Sachs analysts: "There are encouraging signs for Democrats in the Senate runoffs … Polls show the two Democratic candidates with a very slim advantage (less than 1pp in both cases) and early voting appears to have moved slightly in the Democratic direction … "That said, the Republican Senate candidates in Georgia still appear to have a slim structural advantage, as they won more votes than Democrats in the November election … [A] very close contest—within a few tenths of a percentage point—would likely delay the result for at least a few days." WALL STREET BACKS GOP IN GEORGIA — CNBC's Brian Schwartz: "Republican Sens. Kelly Loeffler and David Perdue … have received a late surge of donations from the real estate and financial industries. Their Democratic challengers, Raphael Warnock and Jon Ossoff, respectively, have otherwise enjoyed a fundraising edge in the races, which will determine whether Democrats or the GOP will hold an edge in the Senate." BUSINESS GROUPS LINE UP AGAINST ELECTORAL CHALLENGE — Our Matthew Choi: "America's business leaders are ready to put the presidential election to rest. More than 100 business executives, the U.S. Chamber of Commerce and the National Association of Manufacturers released statements … urging Congress to certify … Biden's electoral win. "Executives and founders of industries ranging from finance to media to fashion pushed back against … Trump's quixotic effort to overturn the election and insisted that Congress focus instead on the fallout of the coronavirus pandemic." Via Business Roundtable : "Claims of electoral fraud having been fully considered and rejected by federal and state courts and state government officials, the integrity of the 2020 presidential election is not in doubt. There is no authority for Congress to reject or overturn electoral votes lawfully certified by the states and affirmed by the Electoral College." | | | |   | | | | | | STOCKS FALL AS TRADING STARTS FOR YEAR OF GREAT EXPECTATIONS — AP's Stan Choe and Alex Veiga: "U.S. stocks pulled back from their recent record highs Monday, as big swings return to Wall Street at the onset of a year where the dominant expectation is for a powerful economic rebound to sweep the world. "The S&P 500, which ended 2020 at an all-time high, slid 1.5 percent after earlier dropping as much as 2.5 percent. It was the benchmark index's biggest decline since late October. Technology companies accounted for a big share of the sell-off, along with industrial, communication services, health care and other stocks. Only the S&P 500′s energy sector managed to eked out a gain." HOW THE GEORGIA RUNOFFS COULD RATTLE STOCKS — Reuters' Lewis Krauskopf: "Control of the U.S. Senate is at stake with Tuesday's dual runoff elections in the state of Georgia, and the results may ripple through a stock market that closed 2020 at record highs. "A Democratic victory in both races could tip control of the Senate away from Republicans, potentially boosting the agenda of President-elect Joe Biden. Such a scenario could hurt areas of the market that benefited from expectations that a gridlocked Congress — with Republicans holding the Senate and Democrats running the House of Representatives — would prevent legislative overhauls such as higher corporate taxes and tougher regulations." WHAT IS WALL STREET EXPECTING IN 2021? — Bloomberg's Sam Potter: "After a year that made a mockery of every best-laid investment plan, the prognosticators of Wall Street could be forgiven for greeting 2021 with an abundance of caution. Instead if there's an oversupply of anything, it's optimism. Recovery. Revival. Rotation. Reset. "These are the words dominating the annual stack of market outlooks from the world's biggest banks and investment firms for the year ahead. Caveats abound, but the consensus is that after the Covid-spurred crash, the vaccine is setting the stage for a new period of economic growth — and rising asset prices." | | A message from Blackstone: Blackstone adds long-term value to our companies: We're committed to partnering with the companies in which we invest—through good times and bad—to help strengthen their long-term performance. Building resilient businesses goes beyond just driving better investment returns: it can also contribute to inclusive economic growth that creates great jobs and uplifts communities. And by supporting emerging businesses in fast-growing sectors ranging from logistics to life sciences, we can help accelerate solutions to meet the unique challenges of the moment.
Our long-term approach is what has helped us deliver on behalf of our investors—which include more than 31 million U.S. pensioners—over our more than 35-year history. See how our bottom line goes beyond returns. | | | | | | BIDEN ADMINISTRATION COULD UNSETTLE BANKS — WSJ's Telis Demos: "Historically, investors in banks would be worried about stepped-up financial regulation from a new Democratic administration. This time around, however, a bigger long-term worry might be government efforts that could disrupt banking itself. "There are a handful of measures either working their way through agencies or being discussed in Democratic policy circles aimed at broadening access to financial services, which could force traditional banks to compete more — either with the government, technology upstarts, or both in combination." POWELL'S FUTURE AS FED CHAIR COULD BE AFFECTED BY FED'S COVID RESPONSE — NYT: "Jerome H. Powell, the 67-year-old chair of the Federal Reserve, will face pressure from all sides in 2021, and he could find himself auditioning for his own job. His term expires in early 2022, which means that President-elect Joseph R. Biden Jr. will choose whether to renominate him. "Mr. Powell, a Republican who was made a Fed governor by President Barack Obama and elevated to his current position by President Trump, has yet to say publicly whether he wants to be reappointed, reports The New York Times's Jeanna Smialek. His chances could be affected by the Fed's coronavirus crisis response, which has been credited as early and swift." FED HAD A LOAN PLAN FOR MIDSIZE FIRMS HURT BUT COVID, BUT FEW TAKERS — WSJ's Nick Timiraos: "In the depths of the financial panic from Covid-19 last year, the Federal Reserve offered to lend to a wide swath of businesses — something it had never done before. Yet it struggled to find takers. The Main Street Lending Program aimed to help pandemic-hit businesses that were too small to borrow in the bond market but might need more help than a small-business loan from the popular Paycheck Protection Program. "'There was a program here that looked nice on paper, but in practicality, it has not worked,' said Mike Cazaz, chief executive of Werner Aero Services, a New Jersey supplier of aircraft engines and parts that couldn't get a loan under the program." | | | | A NEW YEAR MEANS A NEW HUDDLE IS HERE: Huddle, our daily congressional must-read, has a new author! Olivia Beavers took the reins this week, and she has the latest news and whispers from the Speakers' Lobby. 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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