| | | | |  | | By Zachary Warmbrodt and Sam Sutton | | Presented by |  | | | 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.
| | Love ‘em or hate ‘em, you have to keep an eye on American Compass. The eight-person think tank founded by Oren Cass has made frequent appearances here in MM because it’s breaking the rules of conservative economic thinking. It makes the case that rigid adherence to tax cuts, deregulation and free trade have been disastrous for the economy and that there’s a role for the government to make capitalism work better for workers and families. As the possibility of Trump 2.0 nears, the extent to which American Compass gains ground will be a key indicator of how durable economic populism will be on the right. In a newsy deep dive out this morning, Zach digs into how American Compass is going about winning over allies and taking on established opponents in the conservative think tank world. “We see a very core part of what we do as being willing to have a fight with anybody on any side who is just wrong and forcing those conversations, whether it’s with the AEIs and Heritage’s of the world, whether it’s with the Patrick McHenry’s and Pat Toomey’s of the world,” Cass said. In a big move, American Compass will announce today that Michael Needham, Sen. Marco Rubio’s former chief of staff, will be its new chairman. Needham, who also once led the Heritage Foundation’s advocacy arm, will help expand the group’s Washington footprint. He gives Cass credit for shaping thinking that led to one of Rubio’s signature economic policies, the Paycheck Protection Program. Rubio told MM: “American Compass is positioned to play a huge role in the policy fights next year, and I’m excited Mike Needham will be part of that effort because we cannot afford to miss this opportunity by falling back on outdated policy solutions.” American Compass is having a moment right now in part because of Sen. JD Vance’s elevation as former President Donald Trump’s running mate. Vance has praised the group in the past, and his staff has close ties to the organization, including a senior adviser who was once the group’s research director. Looking ahead, Cass sees an opportunity if there’s a second Trump administration. It has allies on the Hill, and Trump’s appointees will probably represent a mix of new and old GOP thinking. “There will be a level of interagency fighting and debating,” Cass said. “Where we will play a very important role is as essentially the provider of ammunition for one side of those debates.” IT’S THURSDAY — You can reach Zach at zwarmbrodt@politico.com. And as always, Sam can be found at ssutton@politico.com.
| | A message from Capital One: Capital One recently announced our historic, five-year, $265 billion community benefits plan in connection with our proposed acquisition of Discover to advance economic opportunity and financial well-being. This plan is twice as large as any other community commitment developed in connection with a bank acquisition and demonstrates that the combined Capital One and Discover will create an opportunity to provide more lending, investment, and services for underserved communities than the institutions would undertake on a stand-alone basis. | | | | | | | Second-quarter GDP released at 8:30 a.m…. Senate Appropriations marks up the T-HUD spending bill, among others, at 9:30 a.m.... Senate Banking holds a hearing on “Advancing National Security through Export Controls, Investment Security, and the Defense Production Act” at 10 a.m.... Biden’s decision — President Joe Biden delivered a speech from the Oval Office on Wednesday night explaining his decision to step down from the top of the ticket. “I believe my record as president, my leadership in the world, my vision for America’s future all merited a second term. But nothing — nothing — can come in the way of saving our democracy, and that includes personal ambition,” he said, per Eli Stokols and Lauren Egan. GDP — The median forecast is that the economy grew by 2 percent last quarter. That would represent a slowdown from the torrid pace at which it expanded last year, but it would also be another strong indication that Federal Reserve Chair Jerome Powell is close to achieving a so-called soft landing. “Right now, we are still on a path for a gradual moderation,” Sarah House, senior economist at Wells Fargo, told Bloomberg’s Enda Curran and Charles Ayitey. “But there are still a lot of questions around, do things change more quickly than expected?” Harris’s approach to econ policy — Vice President Kamala Harris was not a major player in crafting the Biden administration’s economic agenda. When she engaged in policy briefings, she largely focused “her questions for economists on how certain policies affect workers and families at a personal level,” Jim Tankersley, Jeanna Smialek and Ana Swanson report for the New York Times. — A former adviser told The Wall Street Journal That she works on issues that “impact people’s lives on the ground,” including reducing drug prices and broadband access. Strange bedfellows — Former Federal Housing Finance Agency Director Mark Calabria, former FDIC Vice Chair Tom Hoenig, Better Markets CEO Dennis Kelleher and Aaron Klein of the Brookings Institution joined together in a POLITICO Magazine op-ed in opposing the Financial Stability Oversight Council’s call for Congress to consider a backstop for mortgage service providers. “If Congress were to go forward and create such a backstop, expectations in the market would be that mortgage servicers were guaranteed by taxpayers — undermining market discipline and reviving the cycle of privatizing gains and socializing losses,” they wrote.
| | | | Live briefings, policy trackers, and procedural, industry, and people intelligence from POLITICO Pro Analysis gives you the insights you need to focus your policy strategy this election cycle. Secure your seat. | | | | | | | | | Hill calls for a Basel III re-do — Federal Deposit Insurance Corp. Vice Chair Travis Hill said regulators should fully — and jointly — repropose a plan to raise capital requirements for big banks, Michael Stratford reports. Hill is “skeptical of re-proposing only parts of the rule,” he said in remarks at the American Enterprise Institute. “While some changes may be relatively straightforward and, in isolation, may benefit less from additional feedback, everything in the framework is related.”
| | | | A message from Capital One:   | | | | | Republicans press Powell on Cap One-Discover — Zach reports that Republicans are putting new pressure on Fed Chair Jerome Powell to make a decision on the merger of Capital One and Discover. In a letter led by Rep. Scott Fitzgerald, 17 GOP lawmakers ask Powell to “promptly consider and process” the merger application. They say the acquisition has the potential to bolster financial stability and benefit consumers. Reps. Andy Barr, Ann Wagner, French Hill and Blaine Luetkemeyer are among those who signed the letter. “We trust, in the interest of preserving agency independence, that the Federal Reserve will appropriately discount the vacuous and politicized arguments that the merger and acquisition process is a ‘rubber-stamp,’” they write. Mark your calendars — Senate Agriculture Chair Debbie Stabenow (D-Mich.) has told some committee members to expect a markup of her crypto bill on July 31, Eleanor Mueller reports. Key Republican opposes Goldsmith Romero — Republican Sen. Mike Rounds on Wednesday said he expects to vote against Christy Goldsmith Romero’s nomination to lead the FDIC, Jasper Goodman reports. It’s a sign that Goldsmith Romero could face significant Republican opposition.
| | | | SUBSCRIBE TO GLOBAL PLAYBOOK: Don’t miss out on POLITICO’s Global Playbook, our newsletter taking you inside pivotal discussions at the most influential gatherings in the world. Suzanne Lynch delivers the world's elite and influential moments directly to you. Stay in the global loop. SUBSCRIBE NOW. | | | | | | | | Imagine that — A new study from Berkeley Law’s Frank Partnoy and Peter Molk found that members of Congress tend to make money when they short a stock, Matt Phillips reports for Sherwood News. Hype ain’t cash — Markets tumbled Wednesday amid signs that it might take a while for Big Tech’s massive investments in artificial intelligence to generate a return, per Bloomberg’s Rita Nazareth. — Exchange-traded funds linked to the cryptocurrency ether notched $106 million in net inflows on their first full day of trading, per Reuters.
| | A message from Capital One: Developed in partnership with a coalition of leading community groups, our five-year community benefits plan includes significant financial and programmatic commitments through community development, Community Development Financial Institutions (CDFIs), philanthropy and pro bono, consumer card and auto lending, small business and supplier diversity, and bank access. These commitments will aim to expand economic opportunity for underserved consumers, including those in low- and moderate-income (LMI) neighborhoods, rural areas, and communities of color. It will also support increased access to best-in-class products and services for unbanked or underbanked consumers as well as consumers across the credit spectrum and expand access to capital and opportunity. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
