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. Wall Street executives see a bit of good news in the otherwise frustrating debt limit talks: Rep. Patrick McHenry’s on the case. He didn’t want to go down this road. The North Carolina Republican, who chairs the House Financial Services Committee, told us in November that he opposed the idea of Republicans trying to extract spending cuts in exchange for raising the government’s borrowing authority. He cited the risks that would come if Washington failed to pay its bills. One of the House GOP’s most experienced vote counters, he also turned down a viable shot at Republican leadership this year. He opted instead to seek bipartisan deals on crypto and investment rules with Rep. Maxine Waters at the Financial Services panel. Now, he’s a prominent player in debt-limit negotiations between Speaker Kevin McCarthy and President Joe Biden. He’s been one of McCarthy’s two key emissaries negotiating with White House aides in recent days, and he accompanied the speaker to a meeting with Biden this week. Executives, lobbyists — and even some Democratic lawmakers — are watching him closely and want to believe he’ll help deliver a deal before financial catastrophe ensues. It’s a notable transformation for someone who entered Congress as a conservative bomb-thrower. Shai Akabas, director of economic policy at the Bipartisan Policy Center, described the McHenry of 2023 as “one of the adults in the room” — and one who brings a financial markets perspective to the talks. “McHenry is the ideal person to play a more active role in getting a deal done because he is both a trusted ally of the speaker and respected by the rank and file in the caucus,” one executive at a large bank told MM. “His voice on the need to get a deal done and avoid default has been critical to the cause.” Rep. Jim Himes (D-Conn.), a Goldman Sachs alum who has served for years with McHenry on House Financial Services, told our Eleanor Mueller he too is hopeful that McHenry is “a moderating influence in the conference.” “I trust he’s that voice of reason,” Himes said. “But the question is, will it be enough?” McHenry’s position is reminiscent of previous party lieutenants who chaired important committees but held far greater influence, according to Joshua Huder, senior fellow at Georgetown University’s Government Affairs Institute. “McHenry is fulfilling a similar function for McCarthy,” Huder said. “He’s easing Wall Street concerns, negotiating policy well beyond his control, and helping his conference navigate the biggest hurdle it has faced.” McHenry spokesperson Laura Peavey said he has remained consistent in his view that default is not an option and that the debt ceiling should be raised with as little drama as possible. She said McHenry for years has also been “sounding the alarm” on spending and the need to address U.S. debt. “The reality is that there are not enough votes in the House or Senate for a clean debt limit increase,” she said. “He is now working toward a negotiated solution that meets the Speaker’s policy parameters, can pass both the House and Senate, and addresses federal spending.” It’s Wednesday — Are you freaking out yet? Let us know: Zach Warmbrodt, Sam Sutton.
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