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October 10, 2022
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THE TOP
Happy Monday morning. We’re 29 days from the 2022 midterm elections
There are a few interesting dynamics we’d like to note at the beginning of this week.
| → | The Consumer Price Index data for September will be released on Thursday morning. CPI is the most high-profile measure of inflation, and this is the final report before voters head to the polls. With the Federal Reserve jacking up interest rates by 75 basis points at a time, Congress, Wall Street and the White House are searching for any signs that inflation is cooling. |
As we’ve noted, the U.S. economic picture is incredibly complex right now. The economy added 263,000 jobs in September, and unemployment is at a 50-year low of 3.5%. While President Joe Biden and Democratic leaders were quite pleased by this, Federal Reserve Chair Jay Powell and investors aren’t. The Federal Open Market Committee, which sets monetary policy, next meets on Nov. 1-2, just days before the election. Another “jumbo” rate hike is practically guaranteed at this point.
| → | The Jan. 6 select committee will hold a hearing on Thursday. The panel hasn’t released an agenda for the session yet. |
| → | Even though the Senate is out until mid-November, the Senate Judiciary Committee will hold a hearing on Wednesday for six of Biden’s judicial nominations, including Anthony Johnstone’s nomination for the Ninth Circuit Court of Appeals. |
| → | For the second time during his gubernatorial campaign, violence has touched GOP Rep. Lee Zeldin of New York. Two men were shot outside Zeldin’s Long Island home on Sunday. Zeldin’s daughters were inside the house at the time, but they were unharmed thankfully. Zeldin was the victim of an attempted stabbing back in July. |
| → | Sen. Tommy Tuberville (R-Ala.) and Rep. Marjorie Taylor Greene (R-Ga.) made racist remarks during rallies held by former President Donald Trump over the weekend. Greene also recently compared Biden to Adolf Hitler, a remark for which some Democrats want her censured. Trump, of course, previously made his own racist comments about former Transportation Secretary Elaine Chao. |
This morning, we’re going to focus on Friday’s debate between Democratic Sen. Raphael Warnock of Georgia and Republican challenger Herschel Walker. The event will take place at the JW Marriott Savannah Plant Riverside District on Friday, Oct. 14 at 7 p.m. This is the only face-to-face clash for Warnock and Walker during the campaign.
The Georgia race – at this moment – looks like the decisive contest for control of the Senate during the 118th Congress. Democrats currently have a slight edge in Pennsylvania, while Republicans have a slight edge in Nevada. Everything else being even – North Carolina could upset our hot take – that makes the Peach State seat currently held by Warnock the key to the Senate majority.
A GOP strategist suggested this will be “the most widely watched debate in American history.” They may not be wrong. Democratic Lt. Gov. John Fetterman and Republican Mehmet Oz aren’t facing off in Pennsylvania until Oct. 25, which is after voters will have begun casting ballots. In Nevada, Democratic Sen. Catherine Cortez Masto and Republican AG Adam Laxalt may not debate at all. The Ohio Senate debate is tonight. Arizona and North Carolina already had what will likely be their only debates. Wisconsin GOP Sen. Ron Johnson and Democratic Lt. Gov. Mandela Barnes have had one debate, with another slated for Thursday. Sen. Marco Rubio (R-Fla.) and Rep. Val Demings (D-Fla.) will debate once on Oct. 18.
The Georgia race has been dominated by scandals involving Walker. The Daily Beast reported last week that Walker allegedly paid for an abortion for his then-girlfriend in 2009. The Daily Beast followed up with a report that Walker has a child with the same woman. The New York Times disclosed that Walker urged the woman to have a second abortion, which she refused to do. Christian Walker, the candidate’s son, attacked his father on social media.
Despite the uproar, Republicans largely have stuck with Walker, at least in public. However, the Walker campaign fired its political director “after suspected leaking to the media,” CNN reported on Friday.
NRSC Chair Rick Scott (Fla.) and Sen. Tom Cotton (R-Ark.) will be in Georgia on Tuesday to show solidarity with Walker. We expect more GOP senators may show up Friday in Savannah, although the vast majority of them haven’t said anything, including offering support for Walker. The NRSC continues to back Walker with ads, as do GOP-aligned outside groups. You’ll see more Republican consultants and staffers on the ground in Georgia as Election Day gets closer.
Needless to say, Walker is desperate for anything that can change the subject, and Friday’s debate offers his best chance for that in the short run. The bar for Walker’s performance during the event will be pretty low, and Republicans will work this week to set it even lower – when they’re not avoiding questions about Walker’s personal life. It’s fair to say the former football star hasn’t shown himself to be a public policy expert up until this point of the campaign.
Walker will try to hit Warnock on inflation, crime and immigration, pretty standard campaign fare for Republicans this year. They’re also effective attack lines as we can see across the entire Senate map. Warnock, for his part, will play up his legislative record in the Senate during the last two years.
After covering Warnock, a debate very much plays to his strengths. Warnock tweeted about the debate during the weekend, and the Democratic incumbent continues to suggest that he wants a second one in Atlanta. Warnock is clearly banking on making a strong showing on Friday.
– John Bresnahan
Next week: We’ll be in Miami one week from today for our interview with Mayor Francis Suarez (R) on Monday, Oct. 17 at 10 a.m. ET. If you’re not in Miami, join us on the livestream! We’ll be talking to Suarez about issues facing small business owners coming out of the pandemic, during the final installment of our “Road to Recovery” series. RSVP Here.
THE INSIDE GAME
Bankman-Fried, in D.C. this week, has gone dark
Sam Bankman-Fried made a name for himself this primary season, pouring tens of millions of dollars into support of House Democratic candidates. But after the spring’s blitz of spending, the crypto billionaire and FTX CEO has cut way back.
Bankman-Fried is heading to D.C. this week to speak at the Bipartisan Policy Center, an event taking place just under a month until the midterms. The billionaire is slated to talk about “recent movements in the crypto market, the role of regulation, and the long-term future of the industry.”
This year, a substantial chunk of Bankman-Fried’s political spending went to Protect Our Future PAC. The FTX CEO donated $27 million to the group, which backed a number of a Democratic primary candidates in safe House seats across the country.
Protect Our Future’s ostensible mission is to promote candidates focused on pandemic preparedness. But with the exception of failed Oregon Democratic candidate Carrick Flynn, no candidates had any relevant experience in helping the United States avoid another Covid-esque public health disaster. Protect Our Future has also radically reduced its footprint since the primary season and hasn’t run any general election ads to date.
SBF also cut a $6 million check to House Majority PAC in April. This has earned him the title of the fourth-biggest spender in this midterm cycle, prompting many to wonder if Washington had a new power donor on its hands practically overnight.
But the billionaire has kept his wallet closed as the midterm elections heat up and as the DCCC’s executive director has complained of a massive cash gap versus the GOP. According to FEC records, Bankman-Fried’s last campaign donation came on Aug. 31 — a comparatively minor $400,000 check to the Democratic Grassroots Victory Fund. The month prior, Bankman-Fried donated $45,000 to the NRCC. It is possible, of course, that SBF has given dark money to groups that do not have to disclose to the FEC.
It’s also worth noting the price of Bitcoin and other digital assets have crashed as interest rates have risen dramatically. FTX has been purchasing assets of other distressed crypto firms.
Away from the political arena, Bankman-Fried has been the most-watched figure in the crypto world for months when it comes to the future of digital assets in the United States. As we discussed last week, there are more than a few ideas circulating on the Hill. As the 117th Congress moves toward its final few weeks, we’re told that SBF has been pushing hard for one bill in particular – the Digital Commodities Consumer Protection Act.
This is a bipartisan bill introduced by Senate Agriculture Committee Chair Debbie Stabenow (D-Mich.) and Sen. John Boozman (Ark.), the panel’s ranking Republican, in early August. It would carve out a much larger role in crypto regulation for the Commodities Futures Trading Commission. That agency would be tasked with overseeing just about any digital asset that isn’t a security.
Both Stabenow and Boozman have seen campaign cash from Bankman-Fried, who donated $5,800 to both Senate campaigns, plus a $20,800 donation to the Stabenow Victory Fund.
If you need any evidence for how much SBF seems to like the CFTC, look no further than FTX’s personnel. Last year, the firm added Mark Wetjen, a former commissioner at the CFTC who serves as the crypto exchange’s head of policy and regulatory affairs.
And just last month, FTX hired Jill Sommers, another former CFTC commissioner, to join the derivatives exchange’s board of directors. Both Wetjen and Sommers were appointed to the CFTC during the Obama years.
All things being equal, the Stabenow-Boozman bill is considered one of the most promising legislative efforts to supervise digital assets. Crypto lovers and even some consumer advocates see glimmers of a Goldilocks-like approach that would introduce oversight with teeth without squashing the sector.
Does that mean everyone in the crypto-verse loves it? Not exactly. A couple of sources following the legislative process have flagged potential shortcomings in how the bill treats decentralized finance firms, better known as DeFi.
Those concerns were echoed during a hearing last month by Sen. Kirsten Gillibrand (D-N.Y.), who said the bill’s treatment of DeFi was “an area where I think we could improve this bill right now.”
Representatives for Bankman-Fried didn’t respond to a series of questions sent to them last week.
– Max Cohen and Brendan Pedersen
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📅
What we’re watching
The big game in town this week is the Jan. 6 select committee hearing Thursday at 1 p.m. The panel hasn’t announced a topic or witnesses, so there will be a lot of speculation heading into the hearing. Besides the substance, we’ll be listening for any clues about when the panel will release its report. And, of course, we’re curious about the panel’s future as the election draws near.
Also: The Senate Judiciary Committee has a confirmation hearing scheduled for Wednesday at 10 a.m. Six of President Joe Biden’s judicial nominees will appear at the session.
– Jake Sherman and John Bresnahan
👀
Who we’re watching
| → | Herschel Walker: The Georgia Republican faced fresh scandals last week that rocked that state’s critical Senate race. What new Walker story will drop this week? And how will he perform in Friday’s debate against Democratic Sen. Raphael Warnock? All this could decide who controls the Senate come January. |
| → | Reps. Bennie Thompon (D-Miss.) and Liz Cheney (R-Wyo.): The chair and vice chair of the Jan. 6 select committee will oversee the panel’s last public session before the midterm elections. We expect to see more damaging information on former President Donald Trump’s efforts to overturn the 2020 presidential election, but the committee hasn’t released a witness list or itinerary yet. We expect a broader thematic presentation, but we’ll also note the select committee has retained the ability to surprise us. |
– John Bresnahan
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THE CAMPAIGN
| → | New: Sen. Maggie Hassan (D-N.H.) is airing an ad touting her work with Republicans to pass the CHIPS Act. In a new spot, Hassan says the CHIPS Act will lower the prices of cars and electronics, bring manufacturing jobs back to the United States, counter China and strengthen the supply chain. |
“Made in America is the way it should be,” Hassan says to close the spot. It’s instructive to see how Democratic incumbents like Hassan are messaging on the package.
Hassan’s general election opponent, Republican Don Bolduc, said he would be a “Hell no” on the CHIPS Act.
| → | New: Frontline Democratic Rep. Josh Harder (Calif.) is airing a pro-police ad featuring a Stockton police sergeant vouching for the Democrat’s law enforcement bona fides. |
“Josh is raising a family of his own and he knows that we have to get crime under control,” Jim Bock says. “Josh is fighting to get law enforcement more funding, so we can hire more police officers, get the equipment we need, and lock up drug traffickers.”
The spot is just the latest ad from a vulnerable Democrat attempting to distance themselves from the party’s “defund the police” image.
| → | Herschel Walker, the GOP candidate for Senate in Georgia, has a new ad seemingly addressing the negative stories that have come out about his past. Some of the headlines that pop up in the ad are a curious choice, if you ask us. Here’s the ad, and this is Walker’s go-to line on Sen. Raphael Warnock (D-Ga.): |
| → | Maga Inc., the political committee funded by former President Donald Trump, has cut its first three ads. Here’s one about inflation running in Reno, Nev., another on safety and Democrat John Fetterman’s work on a parole board in Pennsylvania and a third hitting Ohio Senate candidate Rep. Tim Ryan (D-Ohio) for voting the party line. |
| → | Trump has also cut an ad in Alabama urging voters to get a ID card. No candidate is mentioned in this spot, which is running statewide. The Alabama secretary of state paid for the ad. |
| → | Former Rep. Randy Neugebauer (R-Texas), who has been out of Congress since 2017, gave $50,000 from his campaign account to Sen. John Cornyn’s (R-Texas) victory committee. Neugebauer has roughly $280,000 left in his coffers. |
– Max Cohen and Jake Sherman
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Presented by Wells Fargo
At Wells Fargo, we cover more rural markets than many large banks, and nearly 30% of our branches are in low- or moderate-income census tracts. What we say, we do. See how.