| | | | |  | | By 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.
| | The logjam over who will have a say in forging Donald Trump’s economic agenda has finally started to break loose. Howard Lutnick, the CEO of Cantor Fitzgerald and co-chair of the president-elect’s transition team, will lead the Commerce Department pending his confirmation by the Senate, Trump announced on Tuesday. At Commerce, Lutnick “will lead our Tariff and Trade agenda, with additional direct responsibility for the Office of the United States Trade Representative,” Trump said. Trump’s decision should stanch the public squabble between Lutnick’s allies and supporters of hedge fund executive Scott Bessent over who should lead Treasury in Trump 2.0. But Trump’s frustration after a week’s worth of infighting, along with Lutnick’s pending appointment, has elevated the likelihood that another contender would emerge. Enter Kevin Warsh. Your host and the inimitable Victoria Guida report that Warsh offers something unusual for the MAGA movement: old-school Republican bona fides. From our report: He “once served in President George W. Bush’s White House and then as the youngest Federal Reserve board member in the central bank’s history. He has spoken about the importance of free trade, the political independence of the Fed, and a strong dollar — all views that could clash with Trump’s own.” “‘Bringing people like Kevin in would demonstrate that the broad coalition of support [Trump] has assembled across the country is equally broad among those in the business world,’ said one former Trump administration official, who, like other people interviewed for this story, was granted anonymity to discuss a situation that is not final. But Warsh’s candidacy has also alarmed some of the more vocal supporters of Trump’s protectionist trade and tariff policy vision. He co-authored WSJ op-eds in years past calling on policymakers to “resist the rising tide of economic protectionism” and has been a vocal defender of globalization and free trade. “‘Tariffs are going to be absolutely essential to the economic vision of the second Trump administration,’ said Nick Iacovella, a former aide to Sen. Marco Rubio (R-Fla.) and senior vice president at a trade group representing U.S. manufacturers. Warsh’s commentary in the Wall Street Journal more than a decade ago is ‘completely at odds with the economic vision President Trump has talked about from when he first announced he was running for president through the last campaign.’” Warsh has since made the case that the U.S. should have a “new economic and security commons” and hinted at a tougher line on trade for adversaries. But the opposition to Warsh coming from the Trump world’s protectionist wing suggests the drama over who will get the top job at Treasury is not over. Remember: Trump’s thinking could always shift, and no decisions are final until they are announced. IT’S WEDNESDAY — Have any sense of timing for a Treasury announcement? Tell me more. Reach me at ssutton@politico.com and @samjsutton.
| | | | A message from the Electronic Payments Coalition: SHOW ME THE MONEY: CORPORATE MEGA-STORES POCKETED THE MONEY BREAKING THEIR PROMISE TO CONSUMERS. Corporate mega-stores promised they would lower prices for consumers if Congress put mandates on Americans’ debit cards. That never happened and the mega-stores pushing up costs pocketed more than $145 billion, according to the Congressional Research Service. Why should anyone believe this time will be different? CONGRESS: STOP THE MEGA-STORE WINDFALL & OPPOSE THE DURBIN-MARSHALL CREDIT CARD BILL! | | | | | | Banking and credit union regulators will testify at House Financial Services at 10 a.m. … The Senate Appropriations Committee holds a hearing on disaster funding needs at 10 a.m … Fed Gov. Michelle Bowman will give a speech on agency policymaking at the Forum Club of the Palm Beaches … The Senate Banking, Housing and Urban Affairs Economic Policy Subcommittee holds a hearing on tax policy at 2 p.m. …
| | | | Want to know what's really happening with Congress's make-or-break spending fights? Get daily insider analysis of Hill negotiations, funding deadlines, and breaking developments—free in your inbox with Inside Congress. Subscribe now. | | | | | | | | | Gruenberg plans his exit — Federal Deposit Insurance Corp. Chair Martin Gruenberg will leave office on Jan. 19, 2025, Michael Stratford reports. Gruenberg has been under pressure to step down for months after a series of reports and an external investigation found the agency had a toxic workplace culture. — The Senate has not held a hearing on Biden’s nomination to lead the FDIC, CFTC Commissioner Christy Goldsmith Romero, and Gruenberg’s scheduled departure after initially saying he would stay on until his replacement is confirmed will clear the way for Trump to appoint his own head of the banking regulator. — Hours after Gruenberg announced his intention to step down, House Financial Services Republicans released their own report drawing similar conclusions that the agency fostered a toxic workplace, and calling for Gruenberg’s immediate resignation. “The investigation reveals the dereliction of duty by high-ranking employees contributed to the entrenched toxic workplace culture,” they wrote. (The FDIC declined to comment.) — Majority Whip Tom Emmer (R-Minn.) told Eleanor Mueller in a statement that “Gruenberg got fired the moment 76 million Americans voted to send President Trump back to the White House and end the Biden-Harris administration’s war on crypto once and for all.” Banking regulators to testify — The news lands on the eve of a House Financial Services hearing where Gruenberg, along with Federal Reserve Vice Chair for Supervision Michael Barr, Acting Comptroller of the Currency Michael Hsu and National Credit Union Administration Chair Todd Harper are scheduled to testify. — In his prepared testimony, Barr strikes a conciliatory tone on working with regulators next year on unfinished proposals to boost bank capital requirements and overhaul liquidity rules, though those plans are expected to get a frosty reception from Trump-appointed regulators. “These initiatives have been joint efforts among the Federal Reserve, FDIC, and OCC, and we look forward to that continued collaboration next year,” Barr says. — In a statement ahead of Wednesday's hearing, The Bank Policy Institute called on the agencies to “pause action on pending rules until the full slate of agency principals are in place in the next Administration. The plethora of major rules in the pipeline – such as proposals on Basel Endgame, long-term debt, corporate governance and brokered deposits – deserves deliberate consideration and time for full public input.” — Meanwhile, a federal watchdog on Tuesday dinged the Fed and FDIC over how their examiners escalate concerns they have about banks. The GAO found, among other things, that the Fed lacks enforceable standards for how examiners escalate concerns about corporate governance and risk management. GAO said that problem “may have contributed to delays in taking more forceful action against Silicon Valley Bank.” Spicy — Declan Harty’s report in Tuesday’s Morning Money about the Investment Company Institute’s call for the Securities and Exchange Commission to halt ongoing rulemaking elicited a response from the markets regulator. “We have different clients than the ICI. The SEC has no intention of suspending its work on behalf of American investors and issuers,” an SEC spokesperson said in a statement. End of an era — U.S. Attorney Damian Williams will step down as the top prosecutor for the Southern District of New York before Trump is inaugurated, clearing the way for Trump’s pick, former SEC Chair Jay Clayton, pending Senate confirmation, Bloomberg’s Ava Benny-Morrison and Myles Miller report. Williams led cases against FTX CEO Sam Bankman-Fried and Archegos Capital Management founder Bill Hwang.
| | | | A message from the Electronic Payments Coalition:   | | | | | House GOP sets its agenda — Olivia Beavers and Jordain Carney report that House GOP leaders laid out their top legislative priorities in a closed-door meeting on Tuesday. Funding the U.S.-Mexico border wall, cutting various Democratic policies and spending programs enacted under Joe Biden, and locking in Trump’s tax cuts are at the top of the list. Warren prepares for 2025 tax policy fight — Sen. Elizabeth Warren will make her opening argument against extending temporary tax cuts put in place by Trump's 2017 tax law at a Senate Banking Economic Policy Subcommittee meeting later this afternoon. “The tax fight is starting now,” the Massachusetts Democrat says in a copy of her prepared remarks. Trump and many congressional Republicans are pushing to extend the 2017 cuts and lower the corporate tax rate, which Warren says would allow “giant corporations making record profits off struggling Americans [to] shovel more cash to their rich executives and shareholders.” Speaking of which… — Senior Republican tax writer Rep. Darin LaHood of Illinois said he expects major provisions of the tax bill, such as lowering the corporate rate, to encounter Democratic opposition, Stratford reports. But there may be some bipartisan agreement on ways to use the tax code to boost the affordable housing supply. Crapo-Smith meeting — Incoming Senate Finance Chair Mike Crapo (R-Idaho) and House Ways and Means Chair Jason Smith (R-Mo.) huddled Tuesday as they take the reins on one of the biggest issues the next Congress will tackle, a spokesperson for Crapo confirmed. Sen. Markwayne Mullin (R-Okla.), a close friend of Smith, told POLITICO’s Ben Leonard that they mulled over next year’s tax package ahead of the expiration of Trump’s tax cuts at the end of 2025. “He's already regrouping for next year,” Mullin said. The Crapo spokesperson declined to detail what the lawmakers discussed. The meeting of the minds comes after Crapo killed a bipartisan tax deal that Smith moved through the House last year, and could be a sign that their strained relationship is on the mend. There will be plenty to negotiate next year, as the lawmakers will be expected to extend much of Trump’s trillions in tax cuts and make room for other ideas the president-elect tossed around on the campaign trail. They’ll also have to navigate conflict over tariffs, as Smith has worked with Trump’s orbit on paying for the package partially with tariffs. Crapo has historically been more skeptical of tariffs, and many in the GOP have shared his concerns. “There’s a place for tariffs, but you have to take them on a case-by-case basis and measure what the repercussions are,” Sen. Mike Rounds (R-S.D.) said, arguing that across-the-board tariffs aren’t “the appropriate way to go.”
| | This land is your land. No, really. — Acting HUD Secretary Adrianne Todman would like to see her successor use federal land to help curb housing costs, Declan reports. Trump has yet to announce his pick for Housing and Urban Development, but Todman – speaking at POLITICO's "Affordable Housing: The New Agenda" event — called on the incoming administration to take a look at “underutilized and unused federal assets, whether it's a military base or a warehouse or other things that the federal government once owned that can be re-purposed for housing.”
| | | | Don't just read headlines—guide your organization's next move. POLITICO Pro's comprehensive Data Analysis tracks power shifts in Congress, ballot measures, and committee turnovers, giving you the deep context behind every policy decision. Learn more about what POLITICO Pro can do for you. | | | | | | | | Shelby Wagenseller has JPMorgan Chase’s Corporate Responsibility team as its Head of Communications for Research, Policy and Insights. Wagenseller was previously an associate director for communications and strategic planning at the Biden White House’s Office of Management and Budget. Daniel Grattan has joined the Structured Finance Association as its new head of global advocacy. He was previously a senior vice president of federal government affairs at Regions Bank and an associate vice president for legislative and political affairs at the Mortgage Bankers Association.
| | | | A message from the Electronic Payments Coalition: DON’T LET CORPORATE MEGA-STORES TAKE FROM CONSUMERS… AGAIN!
Corporate mega-store lobbyists are at it again. They promised to lower prices for consumers if Congress enacted new mandates and price controls on debit cards. Congress gave them what they wanted, passing the Durbin Amendment, but consumers never saw those savings. The Richmond Fed reported 98% of retailers actually RAISED PRICES or kept them the same. Home Depot’s Chief Financial Officer Carol Tomé said on an earnings call in 2011 the company could gain $35 million in revenue annually from lower fees. Today, mega-stores are making the same broken promises if Congress passes new credit card routing mandates. THE DURBIN-MARSHALL CREDIT CARD BILL IS A MULTIBILLION-DOLLAR CORPORATE WINDFALL PAID FOR BY AMERICAN CONSUMERS via less secure transactions and a loss of rewards and services. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
