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. Washington is in political paralysis and faces a catastrophic cash crunch in as little as 10 days. Treasury Secretary Janet Yellen isn’t at the negotiating table with House Republicans. But she is coordinating with the White House at a senior level, with several meetings between the department and the White House happening weekly, according to administration officials. Even further behind the scenes, a team of Treasury Department officials — including career bureaucrats with decades of government experience — is working daily to manage the fallout. The White House is taking a somewhat arms-length approach to how Treasury goes about its work. The two operate closely on messaging, but one White House official told MM that the intention is for Treasury to be seen as having a degree of independence. It’s so Yellen’s default warnings are taken seriously and so the “X-date” — the projection of when the government can’t pay all its bills — doesn’t become politicized. Treasury appears to have maintained its role as a trusted source. Asked last week if he doubted the administration’s latest default deadline, Speaker Kevin McCarthy told reporters: “No. Whatever Janet Yellen says is the date. I’m not going to argue about that.” Inside the building, a Treasury spokesperson said Yellen and Deputy Secretary Wally Adeyemo are on a daily call with the Treasury office that tracks developments in global trading, known as the markets room. Yellen has been getting a daily briefing on the X-date forecast for the last few months. Ben Harris, who recently stepped down as Treasury’s chief economist, said the department’s “apolitical role” is underappreciated. He said “a lot of the people who are engaged in these discussions are career civil servants whose only real interest is the health of the financial system.” Who are they? Treasury fiscal assistant secretary David Lebryk, the highest-ranking career official at the department, is responsible for financing the government’s operations and overseeing the forecast of when it will run out of cash. Lebryk, who has Harvard degrees in economics and public administration, joined Treasury as an intern in 1989. In addition to determining the X-date, his group would also play an important role in potential payment prioritization after the deadline. Assistant secretary for financial markets Joshua Frost, a political appointee confirmed by the Senate about a year ago, is tasked with understanding how the market is reacting – including bank executives and credit rating agencies. He spent more than two decades at the Federal Reserve Bank of New York. Like Lebryk, he reports to Under Secretary for Domestic Finance Nellie Liang, another Fed veteran. Treasury is also part of the administration’s review of debt-limit related legal questions, including the potential invocation of the 14th Amendment. Key players on Treasury’s legal team include general counsel Neil MacBride and principal deputy general counsel Laurie Schaffer, who earlier served at the Fed. Treasury’s main liaison to Capitol Hill is assistant secretary for legislative affairs Jonathan Davidson, a long-time congressional aide who was previously chief of staff to Sen.Michael Bennet (D-Colo.). “For the average American, you could plop them down in a discussion at the Treasury Department and you wouldn’t hear discussions about Democrats and Republicans,” Harris said. “You would hear discussions about avoiding recessions and keeping credit markets well-functioning. It’s a very technocratic discussion, where the primary concern is around the full faith and credit of the United States. It’s not over which political party will come out ahead.” It’s Monday – We’ve got a long week before the Memorial Day break. Keep us posted on what you’re hearing: Zach Warmbrodt, Sam Sutton.
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