💰 Wall Street's GOP prayer

Plus: Down-ballot panic | Thursday, October 20, 2022

Open in app View in browser   Presented By UPS   Axios Sneak Peek By Alayna Treene, Hans Nichols and Zachary Basu · Oct 20, 2022 Welcome back to Sneak. Smart Brevity™ count: 1,026 words ... 4 minutes.     1 big thing: Wall Street moderates pray for big GOP margins Photo: Tom Williams/CQ-Roll Call via Getty Images   There's a quiet whisper among Wall Street independents, and even some Democratic donors in the financial services industry: if House Republicans win, they better win big, Axios' Hans Nichols reports. Why it matters: Investors are growing increasingly worried about what a narrow majority for House GOP Leader Kevin McCarthy (R-Calif.) would mean for the first big fight of divided government: raising the debt ceiling. In private fundraisers and investor conferences, many are concerned that a razor-thin GOP victory will yield a fragile McCarthy speakership — empowering conservative lawmakers to play chicken with the White House. On the debt ceiling, that means the full faith and credit of the United States could end up as roadkill, potentially cratering markets and wiping away trillions of dollars across a variety of asset classes. What they're saying: "Investors are concerned by all the very public talk from McCarthy and the Freedom Caucus about taking us to the brink on the debt ceiling," said Charles Myers, chairman of Signum Global Advisors. "McCarthy winning by a wider margin would be welcomed by investors because it gives him more room to maneuver," he said. "Anything 20 [seats] or higher would be viewed as enough to give McCarthy the control and power over the most extreme part of the caucus." Driving the news: As Republicans' prospects improve in the final stretch of the campaign, McCarthy's pronouncements — on both potential policies as well as his legislative strategies to achieve them — carry more weight. This week, he was explicit in suggesting GOP support on the debt ceiling would come with a political price. Democrats, he warned in an interview with Punchbowl News, would have to agree to spending cuts. Rep. Jim Banks (R-Ind.), who chairs the largest bloc of House conservatives and could be the next Republican whip, went even further today — calling the debt limit "a major leverage point" and insisting "we have to use a moment like that to do things that the administration wouldn't otherwise do." Flashback: In 2011, with a new House GOP majority staring down President Obama on spending and entitlement reform, the U.S. came so close to defaulting on the debt that S&P downgraded the U.S.' AAA credit rating for the first time. After the 2011 debacle, Obama adopted a maximalist — and ultimately successful — position: he would not negotiate on the debt ceiling in 2013. Republicans ultimately caved. During Trump's presidency, Republicans in Congress supported three debt ceiling increases without demanding policy changes. Share this story.     2. 🚨 Down-ballot panic Illustration: Brendan Lynch/Axios   The ACLU is getting involved in secretary of state races for the first time in the group's history, worried about politicization and the integrity of future results if election-deniers are elected in key states, Axios' Alexi McCammond reports. Driving the news: The group is spending $1 million on digital campaigning, social media ads and direct mail to educate voters about where candidates stand on election administration and voting rights in Arizona, Minnesota and Nevada, said senior campaign strategist Zara Haq. The big picture: The intervention by the ACLU comes amid a wave of massive last-minute spending on down-ballot races by Democrats concerned that GOP wins could erode election integrity in 2024 — as well as abortion rights. What we're watching: Forward Majority, a major outside group working to build Democratic power in the states, is pouring $20 million into 25 races across both state chambers in Pennsylvania and Michigan, as well as the Arizona House, which Democrats haven't controlled since the 1960s. And in a new memo sent to stakeholders, obtained by Axios, the Democratic Legislative Campaign Committee (DLCC) writes: "State legislatures need to be a key strategic priority of the Democratic Party — not an afterthought." "We cannot continue to neglect these races, and our democracy cannot stand if we do not make sustained investments now and for years to come." The DLCC has managed to raise over $47 million so far this cycle but has received no funding directly from the DNC and not nearly as much support as it would like from President Biden. Keep reading.     3. 📉 Dems' bear market Illustration: Eniola Odetunde/Axios   A new Monmouth poll of registered voters gave Republicans a six-point advantage on the generic congressional ballot — tipping FiveThirtyEight's polling average in the GOP's favor for the first time since early August. Other warning signs for Dems, from today alone: In Pennsylvania's Senate race, an InsiderAdvantage/FOX 29 poll has Republican Mehmet Oz tied at 46% with Democrat John Fetterman — Oz's best poll of the entire general election cycle. In Nevada, Trump 2020 voters have a six-point advantage on self-reported midterm turnout, according to the CBS News Battleground Tracker. On the economy, Republicans have a double-digit lead on the questions of "which party would do a better job" bringing down inflation, handling taxes, dealing with deficits and creating jobs, according to a CNBC poll.     A message from UPS UPS delivers careers     UPS has one of the strongest and longest-standing promote-from-within cultures of any company in America. An example: Last year, more than 14,000 part-time employees advanced to full-time careers in the company. Learn how UPS delivers careers.     4. ⚖️ Atlanta's busiest grand jury Screenshot: CNN Former Sen. Kelly Loeffler (R-Ga.) and former White House counsel Pat Cipollone have testified before the special grand jury investigating former President Trump and his allies' efforts to overturn the 2020 election results in Georgia, CNN reports. They're the latest in a long list of Trumpworld figures subpoenaed by Fulton County's district attorney, including Rudy Giuliani, former national security adviser Michael Flynn, former House Speaker Newt Gingrich and former White House chief of staff Mark Meadows. Why it matters: It's a reminder that the web of legal threats Trump faces isn't just coming from the Justice Department. ⚡ The latest: An appeals court ruled today that Sen. Lindsey Graham (R-S.C.) must also testify before the Atlanta grand jury, though he has previously indicated he will appeal to the Supreme Court.     5. 👔 Parting shot Photo: Patrick Semansky via AP The towering John Fetterman donned a suit and tie as he greeted President Biden at Pittsburgh International Airport today, giving up his signature hoodie and shorts to tour the construction site of the collapsed Fern Hollow Bridge. Biden, who will attend a fundraiser for Pennsylvania's Democratic Senate nominee tonight, told reporters he's had "16 to 18 requests" to campaign for candidates around the country.     A message from UPS The best pay and benefits package in the delivery industry     You don't need a college degree or an executive title to have a successful career at UPS. Full- and part-time UPS union employees receive industry leading wages, low-cost healthcare, pension benefits, tuition assistance and more. See what these benefits mean to our employees and their families.   📬 Thanks for reading this week. This newsletter was edited by Zachary Basu and copy edited by Kathie Bozanich. Are you a fan of this email format? It's called Smart Brevity®. Over 300 orgs use it — in a tool called Axios HQ — to drive productivity with clearer workplace communications.   Axios thanks our partners for supporting our newsletters. If you're interested in advertising, learn more here. 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