Brian Deese on Biden’s 2023 economic agenda

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Dec 21, 2022 View in browser   By Zachary Warmbrodt Presented by Binance 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 5:15 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: We'll be off next week for the holidays but back to our normal schedule on Tuesday, Jan. 3.  The White House scored major economic policy wins this year with the enactment of massive infrastructure and semiconductor subsidy laws. The administration is now turning to implementing those economic bets, as the U.S. stares down a potential recession heading into the 2024 election and the legislative outlook dims in a divided government. In a Zoom with MM Tuesday afternoon, Biden National Economic Council Director Brian Deese previewed the administration's 2023 economic agenda — though he declined to comment on his own future plans. The No. 1 goal is keeping prices down and lowering inflation without sacrificing economic gains. "Making good on the policy tailwinds that we've now enacted but haven't gotten through into the system is going to be a big, important priority starting on Jan. 1. There is important work that we need to do to make sure that the benefits that were in the Inflation Reduction Act translate to people, like the $35 cap on insulin that goes into effect on Jan. 1." Longer-term productivity is in focus. "The other big part of the president's economic strategy … is how do we lay the foundation for stronger, shared growth. The wonky way of saying it is expanding the productive potential of the economy." "The biggest priority and opportunities we have is trying to use the historic public investment strategies that we've now enacted to crowd in private capital in areas that we know are drivers of innovation." "We are getting to some of the most important and consequential elements of implementation [of the infrastructure law] that will make a big difference in terms of crowding private capital for example on high-speed internet and what that project looks like for the country – the semiconductors piece of that alike." Biden wants the government to move quickly on big projects. "One clear thing we're going to keep trying to make progress on is permitting reform. We really wanted to see that bill pass here." (For context: Senate Majority Leader Chuck Schumer agreed to move Sen. Joe Manchin's bill to speed up energy projects in exchange for his vote on the infrastructure bill.) Deese said the mindset of American business has changed in its approach to the U.S. thanks to a "long-term, stable public investment strategy." Now there's a focus on being able to accelerate things like infrastructure projects, semiconductor fabs and wind energy. "We're going to need to work as a federal government to figure out how we can more effectively facilitate building and building quickly and at scale." Can we cut some red tape and speed up this week? — Before you hit the road, please send scoops to your MM hosts. I'm zwarmbrodt@politico.com and Sam Sutton is ssutton@politico.com. Driving the day … Senate debates the omnibus with passage expected as soon as Wednesday … NAR releases November existing-home sales numbers at 10 a.m. … FTX founder Sam Bankman-Fried has a court hearing that could set up his extradition to the U.S. …   A message from Binance: It's been a tough year for crypto. After unprecedented fraud and mismanagement, industry confidence has been shaken. As the world's largest crypto exchange, Binance believes greater transparency is critical. At Binance, user assets are backed 1:1 and our capital structure is debt-free, and we are eager to work with regulators to help bring order to the markets. Learn more about our commitment to moving forward in Politico this week.   Driving the Day Coming soon: Trump's tax returns — The House and Ways Committee on Tuesday voted to release six years of former President Donald Trump's tax returns, following a years-long legal battle. Wall Street's wins in the omnibus — The finance industry scored a number of lobbying victories in the $1.7 trillion omnibus spending bill revealed early Tuesday. — The biggie — The package includes a sweeping revamp of retirement savings rules designed to encourage more Americans to grow their nest eggs in the market — a potential boon to asset managers and brokers. The retirement section of the bill would, among other things, allow employers to automatically enroll workers in 401(k) plans, delay when people are required to start withdrawing money from tax-deferred accounts and allow older workers to make larger catch-up retirement contributions. — Under the radar — The package also includes language that would encourage the SEC to redo economic analysis for a proposed private fund regulation. Why it matters : Drew Maloney, who represents private equity firms as president and CEO of the American Investment Council, said the request "proves once again that there is growing bipartisan concern that [SEC Chair Gary Gensler] is moving too fast on extreme regulations without considering how proposals will impact small businesses and private investment." Japan rate hike rattles markets — FT: "The Bank of Japan caught investors by surprise with an unexpected change to a core tenet of its monetary policy, sending shockwaves across the currency, bond and equity markets." "Traders described an adjustment to the longstanding yield curve control measures as potentially marking a 'pivot' by the BoJ, the last of the world's leading central banks to stick to an ultra-loose regime." The lesson — Colin Ellis, managing director at Moody's Investors Service, said the market reaction to the Bank of Japan shift "serves as a reminder that unexpected policy actions — even if they are relatively small — can trigger large movements in asset prices, including exchange rates and sovereign bond yields." "As economic and financial uncertainty persists over the coming months, bouts of volatility will be swiftly transmitted across regions and asset classes, given the interconnectedness of markets." Wells Fargo to pay historic CFPB fine — Our Katy O'Donnell: "Wells Fargo will pay $3.7 billion to settle allegations by the Consumer Financial Protection Bureau that it mismanaged auto loans, mortgages and deposit accounts, in the largest penalty ever levied by the agency. … "The bank will pay $2 billion in redress to more than 16 million consumers and a $1.7 billion civil penalty." The silver lining for Wells — BTIG director of policy research Isaac Boltansky said that underneath the penalty and the CFPB's rhetoric is a positive development for the megabank. It's a step toward resolving lingering regulatory issues and indicates the company is on the path to addressing the Federal Reserve cap on its growth. "Consent orders from other regulators are not directly tied to the Fed's asset cap, but resolution on the three CFPB public consent orders, of the bank's nine total outstanding orders, would serve as a directionally positive step for Wells Fargo," Boltansky said in a note to clients.   POLITICO AT CES 2023 : We are bringing a special edition of our Digital Future Daily newsletter to Las Vegas to cover CES 2023. The newsletter will take you inside the largest and most influential technology event on the planet, featuring every major and emerging industry in the technology ecosystem gathered in one place. The newsletter runs from Jan. 5-7 and will focus on the public policy related aspects of the event. Sign up today to receive exclusive coverage of CES 2023.     Crypto SBF nears extradition — Reuters: "FTX founder Sam Bankman-Fried has signed legal papers paving the way for his extradition from The Bahamas to the United States, where he faces fraud charges over the cryptocurrency exchange's collapse, a Bahamas official said on Tuesday." A hearing Wednesday "could set the stage for the 30-year-old cryptocurrency mogul to depart the Caribbean nation, after several days of confusion about the status of Bankman-Fried's extradition." Coinbase worth less than doge — Coindesk: "Shares of Coinbase hit a fresh all-time low on Tuesday as the U.S.-based exchange continues to struggle with low trading volume amid falling crypto prices. Continuing declines for the stock have driven Coinbase's market cap to less than $8 billion versus roughly $10 billion for meme favorite dogecoin, which has suffered its own major tumble in 2022."   A message from Binance:   Regulatory Corner FTC digs into Musk's Twitter — Bloomberg: "The US Federal Trade Commission is deepening an investigation it opened this fall into Twitter Inc.'s privacy and data security practices in the wake of the company's takeover by billionaire Elon Musk, according to people familiar with the matter. … "FTC lawyers have interrogated two former top Twitter executives in the past month — Damien Kieran, the former chief privacy officer, and Lea Kissner, the most senior cybersecurity officer, the people said. … "'Why has Bloomberg News been asleep at the switch regarding government censorship of social media?' Musk said in response to an email seeking comment about the FTC investigation." Gensler poised for bigger SEC budget — Our Declan Harty: "Lawmakers are proposing to give the SEC an 8 percent bump to its budget under the latest government funding deal, granting Chair Gary Gensler's calls for additional resources. "In the end-of-year spending package released early Tuesday morning, congressional appropriators allocated $2.15 billion to the SEC — the full amount that the roughly 4,500-person agency asked for in March. … "Lawmakers are proposing to give the Commodity Futures Trading Commission a budget of $365 million for the rest of fiscal 2023, up from $332 million budgeted last year."   A NEW POLITICO PODCAST: POLITICO Tech is an authoritative insider briefing on the politics and policy of technology. From crypto and the metaverse to cybersecurity and AI, we explore the who, what and how of policy shaping future industries. We're kicking off with a series exploring darknet marketplaces, the virtual platforms that enable actors from all corners of the online world to traffic illicit goods. As malware and cybercrime attacks become increasingly frequent, regulators and law enforcement agencies work different angles to shut these platforms down, but new, often more unassailable marketplaces pop up. SUBSCRIBE AND START LISTENING TODAY.     Fly Around Finucane leaves BofA role — Bloomberg: "Anne Finucane is stepping down as chair of Bank of America Corp. Europe and passing the torch to Vice Chairman Paul Donofrio. … Finucane became the firm's first chair of Bank of America Europe in 2018, and was the first female vice chairman at the parent company." Lawmakers press Biden to regulate investments in China — POLITICO: "The congressional omnibus spending package includes language urging the Biden administration to increase oversight of American investments in China — an executive order that many lawmakers expected by now, but has not yet been issued." Amazon dodges EU fine — Reuters: "Amazon on Tuesday reached a settlement with the European Union in three antitrust probes after the U.S. online retailer addressed the EU's concerns over its use of sellers' data, saving it from a fine of up to 10% of its global turnover." Bridget Plitt is joining the Conference of State Bank Supervisors as senior Vice President of learning and development. She previously served as chief learning officer at the OCC.   A message from Binance: It's been a tough year for crypto. Macroeconomic headwinds have ushered in challenging market conditions, followed by unprecedented fraud and mismanagement. The combination rocked consumer confidence and created a level of skepticism about the future of crypto. Binance strongly believes crypto's best days remain ahead, but to get there, transparency is the only path forward. At Binance, we are investing in transparency protocols to demonstrate our strong financial health. Our capital structure is debt-free and all user assets are backed 1:1. Binance does not borrow against customers' funds or invest them without their consent. Most importantly, we look forward to working with policymakers to better protect consumers while promoting innovation. Learn more about our commitment to moving forward in Politico this week.     Follow us on Twitter Mark McQuillian @mcqdc Ben White @morningmoneyben Victoria Guida @vtg2 Katy O'Donnell @katyodonnell_ Zachary Warmbrodt @Zachary Sam Sutton @samjsutton   Follow us

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