Harris Allies Eye Building Business Ties, With Treasury in Focus
Kamala Harris is likely to assemble an economic team that will seek to build ties with the business community if she wins the November election, with key policy battles looming over taxes, the debt limit and funding the federal government.
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(Bloomberg) — Kamala Harris is likely to assemble an economic team that will seek to build ties with the business community if she wins the November election, with key policy battles looming over taxes, the debt limit and funding the federal government.
Pursuing support from big business would mark a clear shift from President Joe Biden, who at times vilified big business for reaping record profits while American households suffered a historic inflation surge. That strategy left him lacking a big bloc of corporate executives to cheer on his Bidenomics agenda.
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The coterie of executives Harris is close to — including prominent investment bankers Ray McGuire, Blair Effron and Peter Orszag, along with former American Express Co. chair Ken Chenault and her brother-in-law Tony West, an executive at Uber Technologies Inc. — is encouraging the campaign to fix that, according to people familiar with the matter.
Usually that’s a job that falls under the purview of the Treasury secretary. The role ranges from overseeing tax policy to managing the $28 trillion Treasuries market and conducting international economic diplomacy, along with coordinating financial regulation. The incoming secretary will likely also have a hand in choosing the next chair of the Federal Reserve.
Most immediately, the new Treasury chief will be on point to avert a potentially catastrophic default as the federal debt limit suspension expires in 2025. With Harris planning to boost taxes on corporations and wealthy individuals to help pay for social investments, an ability to engage effectively with both Congress and the business community would be a major asset. The Democrat also aims to extend Biden’s clean-energy agenda.
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A potential Harris administration “can’t do what it wants to do without support from executives in the business community,” said Ben Harris, who previously served under Treasury Secretary Janet Yellen and is now at the Brookings Institution.
Bloomberg sent inquires either directly to, or to representatives of, the five Wall Street leaders for this story. None of them provided a comment.
Yellen, Biden’s pick after his 2020 victory, won quick praise from both Republicans and Democrats at a time when the US economy’s rebound from the Covid shock was yet to be secured. Choosing a battle-tested former Fed chair also foreshadowed a tenure that would — and has — marked a clear break from the unpredictable years of Donald Trump’s administration, including U-turns on key decisions, bouts of volatility in markets and fraying ties with allies.
But almost four years later, complaints that Yellen stocked the Treasury with economists who lacked business and financial ties may inform what might happen should Democrats hold on to the White House. The Treasury Department didn’t respond to a request for comment.
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Wall Street leaders have emerged as Harris’ most prominent donors and supporters, while fewer economists make up her inner circle.
‘Charm Offensive’
As vice president, Harris has met regularly with executives, like Chenault, Visa Inc. CEO Ryan McInerney and ex-Xerox Holdings Corp. CEO Ursula Burns, who now chairs advisory firm Teneo, Bloomberg has reported. In March, Harris had lunch with Jamie Dimon, CEO of JPMorgan Chase & Co.
The outreach — dubbed a “charm offensive” by Wall Street insiders — has included one-on-one and group discussions over the last two years at the White House and at the vice president’s Naval Observatory residence, with leaders spanning the political spectrum.
Related: Wall Street Brass Courted by Harris as Trump Makes 2024 Inroads
If Harris does choose to govern with stronger ties to business, then tapping Wally Adeyemo, the current Treasury deputy secretary, Commerce Secretary Gina Raimondo or Chenault as Treasury chief could serve that purpose. Adeyemo has worked with companies on implementation of sanctions against Russia, while Raimondo has overseen subsidies to chipmakers and is a former business leader herself.
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Those three names were among a handful floated by political advisers after the Democratic National Convention in August, although those inside the Harris campaign and her close advisers have both publicly and privately said that no list has been created to aid a potential transition.
The Harris campaign didn’t respond to a request for comment.
Adeyemo could end up effectively filling the post at least in an acting capacity. If Harris wins, the Vacancies Act provides for holding over political appointees from the previous administration for up to 300 days.
As for whether a business community member has a shot at Harris’ nod, that could be determined by how strong an influence the progressive wing of the Democratic Party wields as the new team took shape.
Progressive Sway?
Liberal senators including Elizabeth Warren and Sherrod Brown have advocated strict oversight of banks and favored government or real-world experience in dealing with Main Street — rather than corporate chieftains with Wall Street backgrounds.
That could make it tougher for the likes of McGuire and Effron, CEO of Centerview Partners — a key donor in Harris’ first presidential bid — to clear the nomination hurdle. McGuire and Effron spoke regularly with Harris during her vice presidency and have continued to do so since her campaign began last month, according to people familiar with the matter.
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“Just because you are successful on Wall Street, doesn’t mean you are qualified to work in government,” said Jeff Hauser, who runs the progressive Revolving Door Project in Washington. “It’s not going to be a job well-suited to someone who is new to Washington,” he added, noting that even if Harris wins, Congress is expected to remain deeply divided.
Under Biden, Warren’s influence was apparent in securing for her allies top cabinet jobs along with posts across the White House, Treasury and Commerce. Adeyemo has also established a strong relationship with the Massachusetts senator.
Market Chops
Still, knowledge of the financial system is key to the job. With the US federal debt load continuing to climb, a familiarity with markets would be a plus as the new secretary determines what type of securities to sell to investors who’ve sometimes shown signs of choking on record auction amounts.
One potential candidate who’s long been floated as a Democratic pick for Treasury chief is Lael Brainard, Biden’s current National Economic Council director, a perch from which she’s had the opportunity to develop ties with the current president, although not Harris.
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Brainard is a former Treasury undersecretary for international affairs, leaving her intimately familiar with the economic diplomacy aspects of the department.
“It will take someone with strong congressional relationships, an understanding of global supply chains and the backbone to ensure that national security priorities don’t overwhelm market incentives,” said Christopher Smart, founder of Arbroath Group and a former Treasury official.
Major economic posts to fill include the NEC chief, a chair for the Council of Economic Advisers, a Commerce secretary – with both Republicans and Democrats in agreement on tariffs as a key economic-policy tool – and a US Trade Representative.
But it’s the top Treasury job that will get the most attention in the names-roulette that will emerge in coming months.
The most important thing for Washington-watchers to remember? Rarely the first person floated to get a plum administration job gets it. In 2020, Yellen’s name wasn’t publicly in the mix until just days before Biden announced her nomination.
—With assistance from Amanda Gordon and Brian Chappatta.
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