News: The progressives are restless

Tuesday, October 8, 2024

The progressives are restless

Oct 08, 2024

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QUICK FIX

When Joe Biden endorsed Kamala Harris to take over at the top of the Democratic presidential ticket, it was a rare occasion where both grassroots progressives and Wall Street donors swooned.

For lefty policy wonks, Harris represented an opportunity to hit reset on Biden-era economic messaging that hadn’t resonated with voters. For business leaders, the vice president’s relationships with financiers like former American Express CEO Ken Chenault and Lazard’s Ray McGuire gave them hope that a Harris administration would be more open to their perspectives than Biden’s had been.

Corporate Democrats are still singing the vice president’s praises. But now that Harris’s Wall Street allies are being floated for high-impact roles in her potential administration, progressive advocacy groups are starting to wonder if the level of influence they enjoyed during the Biden years could fade under Harris.

The stakes are particularly high given the upcoming battle over expiring 2017 tax cuts, which could provide a vehicle for Harris to enact changes like expanding the child tax credit or raising corporate rates.

"For all of Biden’s success in turning the tide on decades of pro-corporate economic policymaking in Washington, he failed to tackle the trickle-down tax code. This can be the cornerstone of Harris’s economic policy legacy,” Groundwork Collaborative’s Lindsay Owens told MM. “But it won’t happen with Wall Street in the passenger’s seat.”

Progressives always scrap with party centrists over policy and personnel. But the unprecedented circumstances of Harris’s ascent, along with the short runway it provided her campaign to clarify her economic vision and priorities, made it harder for both Wall Street reformers and industry interests to game plan how her administration might operate.

Biden borrowed heavily on Sen. Elizabeth Warren’s network of allies and former aides to staff his administration. There are few guarantees that her network would maintain its sway under Harris, and watchdog groups like the Revolving Door Project have circulated memos outlining their opposition to Wall Street figures who are reportedly under consideration.

The Harris campaign declined to comment.

Still, the amount of speculation and “chatter” was enough for Revolving Door to start getting prepared, Executive Director Jeff Hauser told MM. And as the Harris campaign continues to reach out to corporate leaders directly and through high-profile surrogates – including billionaire and Dallas Mavericks minority owner Mark Cuban — progressives are preparing for more “jump balls” during the transition and early days of the administration.

“I think we should win a few of those jump balls. I expect to win a few of those jump balls – honestly,” said Felicia Wong, a Biden-Harris transition adviser who leads a 501c4 linked to the progressive economic think tank the Roosevelt Institute. “Everything I know suggests there are people who will be considered for jobs who are definitely friends of pro-public, pro-Main Street policies — and not pro-Wall Street policies — at every level.”

IT’S TUESDAY — Any jump balls you’re preparing for? Let me know at ssutton@politico.com.

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Driving the Day

The NFIB optimism index is out at 6 a.m. … The Brookings Institution is hosting an event on ownership transitions at 10 a.m. … The American Bankers Association holds its 2024 Financial Crimes Enforcement Conference in Arlington, Va., running until Thursday … The American Enterprise Institute for Public Policy Research holds a virtual discussion on the Federal Reserve at 2 p.m. … Fed Vice Chair Philip Jefferson speaks at Davidson College at 7:30 p.m.

Hurricane — The destruction caused by Hurricane Helene and Hurricane Milton’s imminent landfall has put pressure on Congress to reconvene in order to bolster disaster relief funds that are running low, Andres Picon reports. Hurricane Milton “is not happening in a vacuum. There are five other states that have emergencies going on from Hurricane Helene,” Rep. Jared Moskowitz, a Florida Democrat who served as the state’s director of emergency management from 2019 to 2021, said Monday on CNN. “There’s absolutely going to be a resource issue.”

— Moody's RMS Event Response on Monday estimated that the U.S. private market insured losses from Helene could be as high as $14 billion. Firas Saleh, the director of Moody’s U.S. inland flood models, said he expects flood insurance purchases to accelerate in Tennessee, North Carolina and other affected regions.

— The havoc caused by Helene has already disrupted voting in key battleground states like Georgia and North Carolina, John Sakellariadis, Liz Crampton and Jessica Piper report. “It’s brutal,” said Amy Cohen, the executive director of the National Association of State Election Directors. The election year is already tense, and some officials are “now dealing with the fact that their homes are gone, and they don’t have water.”

The other transition — Cantor Fitzgerald CEO Howard Lutnick, the co-head of Donald Trump’s transition team, told the FT that they are looking for candidates who are loyal to the former president and his vision. The high turnover rate among staff during Trump’s term was because many appointees were not “pure to his vision,” according to Lutnick.

Harris on 60 Minutes — With recent estimates that the vice president’s economic agenda could add more than $3 trillion to the U.S. debt, CBS correspondent Bill Whitaker pressed Harris on how she intends to pay for policies like expanding the child tax credit, offering first-time home buyers $25,000 in assistance and new small business tax credits. Harris said those programs could be addressed by making “sure the richest among us, who can afford it, pay their fair share in taxes.”

She also justified her reversal of previous stances on fracking, immigration and health care policy by saying the change was a reflection of her time in the Biden administration.

“In the last four years, I’ve been vice president of the United States, and I’ve been traveling our country, and I’ve been listening to folks, and seeking what is possible in terms of common ground. I believe in building consensus,” she said. “We can figure out compromise and understand it’s not a bad thing, as long as you don’t compromise your values.”

Another crisis — Oil prices climbed above $80 per barrel on Monday as tensions continued to mount in the Middle East. Stocks fell as investors pared back expectations that the Federal Reserve will lower interest rates amid signs that the U.S. economy remains strong, per Reuters.

And after all that — Reuters' Dietrich Knauth: “FTX received court approval of its bankruptcy plan on Monday, which will allow it to fully repay customers using up to $16.5 billion in assets recovered since the once-leading crypto exchange collapsed. U.S. Bankruptcy Judge John Dorsey approved the wind-down plan at a court hearing in Wilmington, Delaware, saying FTX's success made it ‘a model case for how to deal with a very complex Chapter 11 bankruptcy proceeding.’”

— Flashback: This was an outcome few thought possible.

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The Economy

Everybody hurts — As manufacturing employment contracts, companies are also scaling back orders on robots that assist with automated production, t he WSJ’s Bob Tita reports.

Grass is greener — New research from Vanguard found that repeatedly switching jobs can cost employees as much as $300,000 in retirement savings if they forget to sign up for the 401(k) plan, or get auto-enrolled at a lower savings rate, according to The WSJ’s Anne Tergesen.

Ownership transitions — A new report from a Brookings Institution-Washington University of St. Louis commission found that employees of family-owned businesses fare better when they’re afforded opportunities to purchase shares in the underlying business. In standard private equity acquisitions, employee outcomes decline until the fourth year after the acquisition, after which they stabilize.

Expect more of this messaging — The 2025 tax policy fight looms large. Joint Economic Chair Sen. Martin Heinrich (D-N.M.) has a new report comparing how the economy has performed under Democratic and Republican administrations. The findings are what you’d expect, but the committee’s Democrats led the report by hammering GOP policymakers for prioritizing “tax cuts that benefit the wealthy and that fail to boost economic growth or pay for themselves.”

Jobs report

Former SEC associate director of enforcement Carolyn Welshhans has joined the law firm Morgan, Lewis & Bockius LLP as a partner, where she’ll be focused on SEC enforcement, investigations and litigation.

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