All eyes are on the northern Atlanta suburbs today as voters in Georgia’s 6th Congressional district decide a nip-and-tuck race that’s shattered records for the most expensive in U.S. history. Finance industry interests helped tip those scales past $50 million, with the industry demonstrating a clear preference for Republican Karen Handel, a former Georgia secretary of state facing off against Democrat Jon Ossoff, a 30-year-old first-time candidate.
That appears to have little to do with where the candidates stand on financial regulation: If the subject has even surfaced in the race, I couldn’t find evidence of it. Instead, the special election to replace Tom Price, now serving as secretary of Health and Human Services, has attracted national attention and wads of outside spending since becoming a referendum of sorts on President Trump’s broader agenda.
A loss by Handel in a district that Price carried by 23 points just seven months ago could sever Trump’s already-fragile grip on his Republican foot-soldiers in Congress, further clouding prospects for a tax overhaul and the rest of his agenda. “We’ll all likely assume that there will be no legislative action for the rest of this Congress,” one bank executive tells me. “The president already lacks a mandate for anyone to follow his lead. But if we lose Georgia, he’ll have no ability to command votes.”
Trump himself nodded to the race’s significance for his standing in a series of tweets, the latest of which was early Tuesday morning:
KAREN HANDEL FOR CONGRESS. She will fight for lower taxes, great healthcare strong security-a hard worker who will never give up! VOTE TODAY
— Donald J. Trump (@realDonaldTrump) June 20, 2017
The Dems want to stop tax cuts, good healthcare and Border Security.Their ObamaCare is dead with 100% increases in P’s. Vote now for Karen H
— Donald J. Trump (@realDonaldTrump) June 19, 2017
The size of Wall Street’s investment in the race is tough to pinpoint. That’s in part because only a fraction of the spending for Handel has come from the hard dollars she’s raised for her official campaign account. Instead, super PACs and other outside groups have picked up the tab for most of it, more than $18 million. But a scan of federal election reports shows Handel has gathered backing in the last several weeks from an array of financial institutions and their trade groups. Among those that cut checks: the American Bankers Association, the National Association of Mutual Insurance Companies, Regions Financial, SunTrust Bank, and Transamerica.
It was not immediately clear why these groups favored Handel, but the giving would be consistent with business interests’ desire to keep Republicans in power and to press their tax-cutting, deregulatory agenda. A search of campaign finance data also revealed that Handel also got contributions from the political action committees of General Electric, General Dynamics, Caterpillar, FedEx, KPMG, Koch Industries, Marathon Oil, Pfizer, and Coca-Cola.
As the race has worn on, Ossoff has presented more as a conciliator and less as an anti-Trump agitator. That, and the wealthy, suburban profile of the district, suggest if successful he’d be a good fit with the New Democrats, who favor a lighter touch with the industry. But while the Democrat has attracted no organized support from financial interests, New York City itself has been a rich vein of the smaller-dollar contributions that propelled his bid. Indeed, two of the top five most generous zip codes to his campaign sit on Manhattan’s Upper West Side, one of the most liberal warrens in the country.
Most immediately, the very public process playing out in Georgia could go a long way toward determining the fate of what has been an unusually private one up on Capitol Hill: The effort by Senate Republican leaders and some handpicked lieutenants to craft a health-care overhaul behind closed doors. The House bill they’re trying to match has met with resoundingly negative response from voters in Price’s old district. An Atlanta Journal-Constitution poll earlier this month showed only one-in-four respondents approve of that package, and more than 80 percent of them said the issue is top of mind as they make their decision.
— House Speaker Paul Ryan heads to the National Association of Manufacturers this afternoon to deliver a pitch for a tax code overhaul that’s lately been struggling (read my write up about why here). According to Ryan’s office, he won’t “litigate the issues currently being resolved between the House, Senate, and administration, but he will describe the important components of any reform.”
Those include making sure the package is permanent; moving to a territorial system, and fixing the incentive for American companies to move abroad. Notably on the last point, though, the speaker will acknowledge “that the particular mechanism must be sorted out with the administration” — a signal he’s not wedded to the border adjustment tax his original blueprint championed. Here’s a sneak peek of the speech, which the speaker will give at 12:45 at the Grand Hyatt at 1000 H St., NW. Watch the livestream here:
“We are actually unique in the world in the way we discourage capital from coming back to America and how we incentivize off-shoring jobs. This is not the kind of exceptionalism we should aspire to…We must think differently, so that once again we make things here and export them around the world…
We are going to get this done in 2017. We need to get this done in 2017. We cannot let this once-in-a-generation moment slip . . . Transformational tax reform can be done, and we are moving forward. Full speed ahead.”
— The administration, for its part, hasn’t been very specific about what it would like a tax overhaul to look like. But Trump officials have consistently advocated scrapping the deduction for state and local taxes. Now, according to the Wall Street Journal, seven House Republicans from blue states that’d be hit particularly hard by that repeal are joining with dozens of Democratic colleagues to oppose the plan. The provision would generate more than $1 trillion over a decade that could go to lowering rates. It would also prove painful for taxpayers in California, New Jersey, New York, all states with healthy Republican delegations.
— Goldman Sachs CEO Lloyd Blankfein weighed in on the state of play in Washington in a Monday interview with CNBC’s Jim Cramer.
On how the Trump administration is doing so far:
You know, I can’t say that I’m on all fours in line with the administration, you know, across the board… But as far as the economy’s going, as far as market’s are going– they represented stimulus– in the form of lower taxes. Spending on infrastructure. Taking away, maybe, some of the layers and layers and layers and redundant regulations. And that’s basically good, certainly good for the market. But generally I think good for the economy.
On the market’s performance relative to expectations for action from Washington:
I’d say the market now is not what he wants to do, but whether he’ll be effective in accomplishing it…The market was discounting, in terms of the alternative to Trump, was discounting higher taxes, potentially more regulation… So already there had to be an adjustment just to get back to neutral. And then, of course, the market is he won’t accomplish very much versus he might accomplish a lot. And it’s somewhere in between. And that’s the variability in the market.
On why he’s tweeting, including criticism of the president:
This is how I think of it: I don’t use that platform for Lloyd Blankfein’s personal point of view, because I know I’m interesting to people because my role at Goldman… And the reason why I do it, it has to fall in my mind, in one of a couple of categories. Either it’s something that is kind of in our wheelhouse of expertise, like for – so I comment that it would be very, very bad to let U.S. government default… The other thing I’ll comment on is when things really affect the ability of our people to be who they are and to do their job and to be effective as professionals. And that’s got the LGBT, the immigrant ban, so that people couldn’t move around with their spouses when they have had a passport for another country. So I commented on those issues because, really, I kind of have to be the champion of our people. And I owe it, I kind of owe it to the body politic to comment where I have expertise.
On talking to Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn, his former Goldman colleagues, now that they’ve joined the administration:
Well, the fact is, and it’s sad for me, in a way, that I talk to them – barely talk to them. Talk to them a lot less. And look, you’re a little bit sensitive to not wanting to go – and, again, the fact of the matter is I always, in my – anybody in my job would always talk from time to time to the Treasury secretary, the national economic advisor. We’re one of the biggest underwriters of government debt. So of course you would. But I’m a little, you know, you get apprehensive about it. You know, this is a kind of a punishing for us.
— Elsewhere, two other Goldman alums, both Democrats, are running for office to oppose Trump. Archie Parnell, the firm’s former global head of tax policy, is trailing Republican Ralph Norman in a special election that voters in South Carolina’s 5th congressional district will decide today. But Phil Murphy, the Democratic nominee for New Jersey governor, is in strong position to replace outgoing Gov. Chris Christie, Bloomberg’s Max Abelson reports.
— The Senate today will take a half-step toward stocking the senior ranks of a still largely leaderless Treasury Department. The chamber is set to votes to end debate on the nomination of Sigal Mandelker, who’s nominated to serve as under secretary for terrorism and financial crimes. And later this week, it’s expected to do the same for Marshall Billingslea, up for assistant secretary for terrorist financing. But a clutch of top Treasury nominees likewise ready for floor action remain stuck in limbo, as Democrats slow-walk otherwise uncontroversial picks in protest of the GOP’s closed-door approach to health care. They are: David Malpass, tapped to be undersecretary for international affairs; Andrew Maloney, assistant secretary for legislative affairs; Brent McIntosh, general counsel; and Heath Tarbert, assistant secretary for international markets and development.
One source close to the process tells me — given the backlog across the executive branch, the Senate’s pace, and the days left in session — it could be September before these officials are in place. That’s unwelcome news for a department trying to juggle a tax-code revamp, a debt-ceiling hike, and a financial-regulatory overhaul, among other priorities.
— SCANDAL WATCH: House Democrats want answers, in the form of details and documents, from former National Security Adviser Mike Flynn about two trips he took to the Middle East in 2015 they say he failed to disclose on security forms, my colleague Karoun Demirjian reports.
This sounds bad: “According to the ranking Democrats on the House Oversight and House Foreign Affairs committees — Elijah E. Cummings (Md.) and Eliot L. Engel (N.Y.), respectively — Flynn’s security forms and interviews revealed a previously unreported, six-day trip he made to Saudi Arabia in October 2015, in which he claimed to have stayed at a hotel that does not appear to exist, have traveled with a friend who was never named, and have spoken at a conference that none of his handling bureaus were aware of.”
- House Speaker Paul D. Ryan is set to deliver a major speech on tax reform at the National Association of Manufacturers summit and will answer questions following his address. Vice President Pence is also scheduled to speak today and House Majority Leader Kevin McCarthy will speak at the summit on Wednesday.
- The Brookings Institution is holding an event on “why economic policy so often so often comes up short” with former Rep. Barney Frank (D-Mass.)
- The Ninth Annual Congressional Women’s Softball Game will take place on Wednesday.
The Senate Finance Committee will hold a hearing on Wednesday with U.S. Trade Representative Robert Lighthizer on the trade policy agenda and the 2018 budget request.
The House Small Business Committee will hold a hearing on Wednesday on the trade promotion coordinating committee.
The Financial Services Roundtable is holding a panel discussion on Wednesday that includes Rep. Blaine Luetkemeyer (R-Mo.) on what to expect from the Trump administration and congress.
The IRS and Urban-Brookings Tax Policy will host a joint research conference on Wednesday.
- The House Appropriations’ Subcommittee on Financial Services and General Government will hold a budget hearing with OMB Director Mick Mulvaney on Wednesday.
- The Senate Appropriations Subcommittee on the Legislative Branch will hold a hearing on the budget requests for the Government Accountability Office and the Congressional Budget Office on Wednesday.
- House Financial Services Committee will continue marking up a bill on Wednesday to reauthorize the National Flood Insurance Program.
- The Senate Committee on Banking, Housing and Urban Affairs will have a hearing on “Fostering Economic Growth: Regulator Perspective” on Thursday.
- The House Ways and Means Committee will hold a hearing on US trade policy agenda with USTR Lighthizer on Thursday.
- The SEC’s Investor Advisory Committee will hold a meeting on Thursday.
The Senate Committee on Agriculture, Nutrition and Forestry will hold a hearing on the nomination of J. Christopher Giancarlo to be chairman of the Commodity Futures Trading Commission on Thursday.
The American Banking Association will hold a forum on payments on Thursday with remarks from Rep. Randy Hultgren (R-Il.), who co-chairs the House Fintech and Payments caucus.
The Global Business Dialogue will host a discussion on trade with North America and with the European Union on Friday.
Tom Toles: “The Republican health-care bill is currently listed in ‘undead’ condition:”
Watch Jared Kushner’s first public remarks during “Technology Week” at the White House:
Comedy Central creates a temporary exhibit dedicated to President Trump’s tweets:
Watch Stephen Colbert show you what it will be like when Amazon takes over Whole Foods: