Overnight Finance

On The Money: Senate confirms Gensler to lead SEC | Senate GOP to face off over earmarks next week | Top Republican on House tax panel to retire

Happy Wednesday and welcome back to On The Money, where we’re glad to see other esteemed organizations following our lead and endorsing LeVar Burton for “Jeopardy!” I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL—Senate confirms Gensler to lead SEC: The Senate on Wednesday confirmed President Biden’s pick to lead the Securities and Exchange Commission (SEC), cementing a Democratic majority at the financial watchdog agency.

  • Senators voted 53-45 in favor of Gary Gensler’s nomination to the SEC, with GOP Sens. Chuck Grassley (Iowa), Susan Collins (Maine) and Cynthia Lummis (Wyo.) joining all 50 Democratic senators in support of his confirmation. 
  • Gensler will be named SEC chairman after he is formally sworn in and lead an agency split between three Democrats and two Republicans.

Getting to know Gensler: Gensler, 63, is a professor at the MIT Sloan School of Management and led the Commodity Futures Trading Commission (CFTC) for most of the Obama administration, supervising options and derivatives markets. He also served as Treasury undersecretary for domestic finance under former President Clinton after spending nearly two decades at Goldman Sachs.

The work ahead: Gensler will take the helm of the SEC at a critical time for the investment industry and U.S. economy. 

  • Stocks have soared through record highs since last summer, fueled by a raft of fiscal and monetary aid and hopes for strong rebound from the COVID-19 pandemic. 
  • The searing rise of the stock market and the growing influence of social media on Wall Street have prompted concerns about overzealous speculation causing widespread financial chaos.
  • The recent collapse of hedge fund Archegos and the immense losses it caused for major banks has also raised questions about the sustainability of the stock market rally and the adequacy of risk management practices.

“We expect the themes of Mr. Gensler’s chairmanship will likely be aggressive enforcement and increased transparency through additional disclosures,” wrote Brian Gardner, chief Washington policy strategist at investment firm Stifel.

I break it all down here.  

 

LEADING THE DAY

Senate GOP to face off over earmarks next week: A simmering debate among Senate Republicans about whether to embrace the return of earmarks will come to a head next week when GOP senators review the caucus rules on Wednesday. The review takes place every two years, but it’s the first opportunity the caucus will have to revisit a 2019 permanent ban on earmarks.

The debate over whether to formally greenlight earmarks is sparking deep divisions among Senate Republicans, who have hammered President Biden over his multitrillion-dollar spending proposals. 

  • The Senate GOP banned earmarks in 2010, with Democrats following suit in 2011, under pressure from then-President Obama and House Republicans amid a rise in concern about the deficit.
  • Now they’re the odd ones out on Capitol Hill, with Democrats in both chambers planning to revive earmarks and House Republicans voting this year to lift their own ban.

The Hill’s Jordain Carney explains here.

 

GOP Rep. Kevin Brady won’t seek reelection: Rep. Kevin Brady (Texas), the top Republican on the House Ways and Means Committee, announced Wednesday that he will not seek reelection next year after serving since 1997.

The background: Brady is term-limited in his role as the top Republican on the powerful panel with jurisdiction over the tax code, meaning he wouldn’t be able to keep the position in the next session of Congress. He previously served as the committee’s chairman from 2015 to 2019, and when Republicans enacted their 2017 tax overhaul under former President Trump.

He acknowledged that the House GOP’s internal rule limiting members to six consecutive years of committee leadership at a time played a role in his decision to retire.

“Did that factor in? Honestly, some,” Brady said. “But as I see it, our committee leader term limits ensure lawmakers who work hard and effectively have the opportunity to lead, to bring fresh ideas to our committee work. In my view, it’s a good thing.”

The Hill’s Cristina Marcos has more here.

Next man up: Brady’s retirement will set off a race among House Republicans for the coveted top slot on the House Ways and Means Committee. Rep. Devin Nunes (Calif.) is the next most senior Republican on the panel, followed by Reps. Vern Buchanan (Fla.) and Adrian Smith (Neb.).

Nunes is already the top Republican on the House Intelligence Committee, so he’d have to give that gavel up if he wanted to lead Ways and Means. He did consider running against Brady for the top GOP spot in 2015—when then-chairman Paul Ryan, who beat out Brady for the gavel in the previous Congress—became Speaker.

 

ON TAP TOMORROW:

  • The U.S.-China Economic and Security Review Commission holds a hearing entitled “An Assessment of the CCP’s Economic Ambitions, Plans, and Metrics of Success” at 9:30 a.m.
  • A House Financial Services subcommittee holds a hearing on trends in financial institution charters at 10 a.m.
  • The Senate Banking Committee holds a hearing on transportation infrastructure investments at 10 a.m.
  • A House Financial Services subcommittee holds a hearing on the transition from LIBOR at 2 p.m.
  • The Hill hosts a panel entitled “Business Best Practices & Bold Next Steps” on sustainable investing at 3 p.m.
  • The Organization for Economic Cooperation and Development (OECD) on Wednesday came out in support of President Biden’s plan to raise the federal minimum wage, arguing that it will boost the United State’s COVID-19 recovery.

 

GOOD TO KNOW

  • Democrats are welcoming the IRS’s announcement that it’s on track to start making monthly payments of the child tax credit (CTC) in July, a step that could help their effort to make the expansion of the credit in President Biden’s relief law permanent.
  • The Treasury Department on Wednesday announced an office to oversee COVID-19 relief programs approved in multiple bills since last year that totaled trillions of dollars.
  • Walmart on Wednesday said it plans to convert the majority of its U.S. hourly jobs to full-time positions by the end of fiscal 2021 as part of its efforts to promote job stability and retain workers. 

 

ODDS AND ENDS

  • Mastercard is updating requirements for banks that process payments for people and websites that sell adult content in an attempt to weed out illegal material.
  • Shares of cryptocurrency exchange Coinbase hit the stock market for the first time Wednesday, opening at $381 to give the company a nearly $100 billion valuation.
Tags Adrian Smith Chuck Grassley Cynthia Lummis Devin Nunes Donald Trump Gary Gensler Joe Biden Kevin Brady On The Money Paul Ryan Susan Collins Vern Buchanan

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