| | | | | |  | | By Ben White and Aubree Eliza Weaver | Presented by Sallie Mae® | 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. | | | The debt limit is back (sort of) — Remember the debt limit? You may not, as it vanished as an issue under President Donald Trump (and his massive deficits). But it has now returned as something to maybe, possibly worry about. MM spent much of the Obama administration covering debt limit battles. And they caused some serious damage including the first debt down grade in U.S. history. Senate Republicans kind of put it back on the table, via our Caitlin Emma and Burgess Everett: "Senate Republicans kept their decade-long earmarks ban … but installed a new internal GOP rule that demands spending cuts as a condition for raising the debt ceiling. … "[N]either the earmark ban nor the debt ceiling language is binding — and that means there's nothing to prevent individual senators from requesting earmarks or voting to raise the debt ceiling without corresponding cuts. Real talk — It's obviously kind of nuts to think of the GOP returning to an austere fiscal stance after the Trump years. But we've been down this road before. And it's a weapon the minority party can wield with some power. Too soon to worry about it much, given the deadline to hike the borrowing limit is July 31. And there are endless budget and spending scenarios that could play out over the never several months given President Biden's infrastructure bill and Democrats' ability to use reconciliation. But as the economy heats up and economists like Alan Blinder talk about a "Biden boom," it's worth keeping an eye on as something that could trip the current president up much as it did his former boss. GOOD THURSDAY MORNING — 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 Sallie Mae®: You shouldn't need a college degree to figure out how to pay for college. Sallie Mae is here to help. We do more than provide families with responsible private student loans, we help them make sense of the entire planning and paying for college process. And if they need to borrow, we work with our customers to manage their loans successfully and achieve financial independence after school. Learn more here. | | | | | | President Biden and Vice President Harris open the inaugural session of the "Leaders Summit on Climate." … Senate Banking has a remote hearing at 9:30 a.m. on "21st Century Communities: Capitalizing on Opportunities in the Clean Energy Economy" … Jobless claims at 8:30 a.m. expected to rise 610K from 576K … Index of leading indicators at 10:00 a.m. expected to rise 1.0 percent … DEMS BLOW OFF GOP INFRASTRUCTURE PROPOSAL — Our Burgess Everett and Marianne LeVine: "Republicans haven't even introduced their infrastructure proposal yet, but the Democratic reviews are already in. And they aren't pretty. "Democrats are roundly rejecting a still unfinished counteroffer to … Biden's $2.5 trillion spending package, potentially moving the slim Senate majority ever-closer to abandoning talks with Republicans on a bipartisan bill. Democrats argue that the GOP plan to spend fewer than $1 trillion and focus on brick and mortar infrastructure is a non-starter and is not the basis for bipartisan negotiations." YELLEN ON CLIMATE CHANGE DISCLOSURE — Our Zachary Warmbrodt: "Treasury Secretary Janet Yellen … said the Biden administration will help drive international efforts to require companies to disclose their contributions to climate change, calling transparency a 'fundamental' step toward understanding the economic risks of global warming. "Speaking on the eve of a White House-led climate summit, Yellen said climate-related disclosures are critical for investors, financial firms and regulators. Her remarks added to evidence that corporate reporting standards are a top priority for the Biden administration as it seeks to rein in financial risk posed by climate change and leverage markets to fuel a more sustainable economy." BUT BANKS NOT TOTALLY ON BOARD ON CLIMATE — Our Zack Colman: "A new financial sector climate change initiative unveiled Wednesday included notable absences from Wall Street, raising questions about whether some of the biggest U.S. banks will follow through on sweeping sustainability pledges. "JPMorgan Chase, Goldman Sachs and Wells Fargo weren't among the initial signatories for the so-called Net-Zero Banking Alliance, even though counterparts Morgan Stanley, Bank of America and Citigroup enlisted. The banking group is part of the broader Glasgow Financial Alliance for Net Zero chaired by former Bank of England Governor Mark Carney, now the UN Special Envoy on Climate Action and Finance." | | | | LAUNCHING THIS WEEK - A NEW PLAYBOOK PODCAST : Washington is full of whispers, colorful characters and hard to believe stories that are all too real. Playbook Deep Dive is a new, weekly podcast that pulls back the curtain on the political theater and dives deep into the most compelling, confounding and often shocking stories from the nation's capital. Featuring the Playbook authors, reporters from across POLITICO's newsroom, and larger than life personalities with stories that you need to hear for yourself to believe. SUBSCRIBE NOW. | | | | | | | | STOCKS END HIGHER — AP's Damian J. Troise and Alex Veiga: "Stocks ended broadly higher on Wall Street after steadily gaining throughout the day. The S&P 500 index added 0.9 percent Wednesday following its first back-to-back loss since March. "Technology companies and banks helped lead the way higher. Communications stocks were among the only losers, led by a 7.4 percent drop in Netflix after the video streaming pioneer disappointed investors with a slowdown in subscriber additions. Much of the market's focus over the next two weeks will be on individual company stocks and how well their quarterly results turn out. Treasury yields held steady and crude oil prices fell." WALL STREET'S NEW TOP COP HAS A FULL PLATE — NYT's Matthew Goldstein: "Wall Street's new watchdog, Gary Gensler, is coming to the job with an ambitious agenda that includes taking a hard look at how to regulate digital currencies and requiring more environmental disclosures of companies. But the market may already be dictating some of the agenda for Mr. Gensler. "A former banker and regulator, Mr. Gensler, 63, was confirmed to lead the Securities and Exchange Commission last Wednesday, and took office on Saturday. One of the first things he will probably have to weigh in on as chairman is whether to assert more control over the red-hot market for special purpose acquisition companies, or SPACs, those speculative businesses that have raised well over $100 billion from investors." PRIVATE EQUITY FIRMS REGAIN TASTE FOR GIANT BUYOUTS — WSJ's Miriam Gottfried and Ben Dummett: "The mega LBO is back. Maybe. Leveraged buyout bids measuring in the double-digit billions, a relative rarity since the financial crisis, have been showing signs of a comeback lately. "Earlier this month, private-equity firm CVC Capital Partners submitted a proposal worth more than $20 billion for Japan's Toshiba Corp., setting off a potential auction. Meanwhile, Stonepeak Infrastructure Partners and Sweden's EQT have teamed up for a bid on Royal KPN NV that could value the Dutch telecommunications company at more than $15 billion, The Wall Street Journal reported." EXECS WONDER IF THEIR STOCK SELL-OFFS WERE LINKED TO ARCHEGOS — WSJ's Michael Wursthorn and Peter Rudegeair: "The collapse of Bill Hwang's Archegos Capital Management in late March took many investors and several banks by surprise when ViacomCBS Inc. and Discovery Inc.'s share prices tumbled. It turns out that some companies were also left wondering why their share prices whipsawed. "Executives at online lender LendingClub Corp. and digital streaming service fuboTV Inc. still aren't sure if sudden swings in their stock were from banks unloading billions in Archegos investments — or if the drop was from something else entirely, according to people familiar with the matter." | | | |   | | | | | | WELCOME TO THE YOLO ECONOMY — NYT's Kevin Roose: "Something strange is happening to the exhausted, type-A millennial workers of America. After a year spent hunched over their MacBooks, enduring back-to-back Zooms in between sourdough loaves and Peloton rides, they are flipping the carefully arranged chessboards of their lives and deciding to risk it all. "Some are abandoning cushy and stable jobs to start a new business, turn a side hustle into a full-time gig or finally work on that screenplay. Others are scoffing at their bosses' return-to-office mandates and threatening to quit unless they're allowed to work wherever and whenever they want." BUSINESSES SCRAMBLE FOR HELP AS JOB OPENINGS GO UNFILLED — AP's Joyce M. Rosenberg: " It looks like something to celebrate: small businesses posting 'Help Wanted' signs as the economy edges toward normalcy. Instead, businesses are having trouble filling the jobs, which in turn hurts their ability to keep up with demand for their products or services. "Owners say that some would-be workers are worried about catching Covid-19 or prefer to live off unemployment benefits that are significantly higher amid the pandemic. Child care is another issue — parents aren't able to work when they need to tend to or home-school their children. For some people, a combination of factors go into their decision not to seek work."
transition, while sending a powerful signal to global financial markets,' Yellen added." BERKSHIRE INVESTORS ADVISED TO WITHHOLD VOTES ON FOUR DIRECTORS — Bloomberg's Max Reyes: "Berkshire Hathaway Inc. investors should withhold votes for four board members because of ineffective oversight on compensation, proxy-advisory firm Institutional Shareholder Services said. "Executive pay at Berkshire 'lacks a measurable link to company performance,' ISS said in a report dated April 16. Two vice chairman at Berkshire, Gregory Abel and Ajit Jain, each receive base salaries of $16 million — among the highest of any executive at a U.S. company, according to the report." | | | | SUBSCRIBE TO "THE RECAST" TO JOIN AN IMPORTANT CONVERSATION : Power dynamics are changing in Washington and across the country. More people are demanding a seat at the table, insisting that all politics is personal and not all policy is equitable. Our twice-weekly newsletter "The Recast" breaks down how race and identity shape politics and policy in America, and we are recasting how we report on it. Get fresh insights, scoops and dispatches on this crucial intersection from across the country and hear critical new voices that challenge business as usual. Don't miss out, SUBSCRIBE . Thank you to our sponsor, Intel. | | | | | | | | TRANSITIONS — Via Talking BizNews: "The New York Post has hired Institutional Investor reporter Will Feuer as a general assignment business reporter. … He has been covering financial news for Institutional Investor" … ENGAGED — Dylan Enright, VP of growth at The Org, chair of Income Movement and a Yang 2020 campaign alum, on Saturday proposed to Newsha Ghaeli, president and cofounder at wastewater epidemiology pioneer Biobot Analytics. The couple met in San Francisco in 2018. He proposed on a pier at Rockefeller Park in Manhattan, right around the corner from where he grew up … Luke Hornblower is now associate attorney at Veterinary Business Advisors, Inc., based in Whitehouse Station, N.J. He most recently was corporate counsel at ICE Data Services. New Housing Report on Renters Saving for a House — Center for Responsible Lending has a new report out "building the case for targeted down payment assistance" | | A message from Sallie Mae®: We know our current student loan financing system isn't working for all students and families. Sallie Mae is committed to being part of the solution. We partner with students to help them find the right financing options — ranging from scholarships and grants to federal and private loans— that set them up for long-term success. We provide students and their families with the tools and information they need to make smart decisions that their future selves will appreciate. This responsible approach is working: 97% of Sallie Mae loans in repayment are being repaid on time and less than 2% default annually. We're eager to work with policymakers and other key stakeholders to build a higher education system that works for all students. Learn more. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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