For Manchin, four out of five ain’t bad

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Mar 10, 2022 View in browser   By Kate Davidson and Aubree Eliza Weaver 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. QUICK FIX Sherrod Brown doesn't need Joe Manchin's advice. Brown, an Ohio Democrat who chairs the Senate Banking Committee, is locked in an acrimonious showdown with his Republican counterpart, Pat Toomey , over the fate of President Joe Biden's five Federal Reserve nominees. Toomey, who has held up a vote on the Fed slate, has said he's willing to advance all but one — Sarah Bloom Raskin, Biden's pick to be the Fed's top Wall Street watchdog. Manchin's message: Take the deal. "If they're willing to move four out of five? Take it and run with it. It's a win," Manchin (D-W.Va.) told our Burgess Everett about the group of nominees, which includes Fed Chair Jay Powell. "I'll take a win any time I get it." For Brown, it's a lot more complicated than that, Burgess and your MM host write: Brown "sees a GOP twisting Senate rules to boycott his panel and trying to dictate who can be confirmed by the Democratic majority. So he does not necessarily appreciate Manchin's advice to jettison embattled Fed pick Sarah Bloom Raskin, whom the GOP opposes because of her strong support for climate action." "Is he on the committee now?" Brown quipped with trademark acerbity. "[You] hadn't told me Manchin is on the committee. Good for him." (For the record, Manchin is not on the committee. And the West Virginia centrist says he is still undecided on Raskin's nomination.) But back to Brown and Toomey — Their staring contest has captivated the Senate, and some colleagues say their odd-couple relationship is starting to unravel on the heels of a bitter fight over Saule Omarova, Biden's scuttled nominee to lead the Office of the Comptroller of the Currency, a bank regulator. "It's strained," said Sen. Mike Rounds (R-S.D.), whom Democrats are trying to peel off, nudging him to show up for a vote so the committee can send the Fed nominees to the Senate. The South Dakotan has so far not been persuaded, saying Raskin is "thumbing [her] nose" at the committee. Brown is digging in , with the support of the White House. Letting the other four Fed nominees advance without Raskin would imperil her nomination. (An unthinkable outcome just a few months ago for a nominee who has won Senate confirmation twice before with unanimous support.) Moreover, Democrats argue that caving to Toomey's demands would risk emboldening the GOP to repeat its hardline tactics in other committees — like, say, when the Judiciary panel considers a Supreme Court nomination in the coming weeks. Toomey thinks he can keep his side in line — "I wouldn't be doing this if there weren't uniform agreement among Republicans," he said. "We're not in any hurry." The upshot: Don't expect either one to blink any time soon. CRYPTO INDUSTRY UNDER PRESSURE TO BLOCK RUSSIANS — Pressure is mounting on the cryptocurrency industry to block access to Russians as economic sanctions push the ruble to the edge of collapse. Our Sam Sutton: "The wide-ranging sanctions and a growing humanitarian crisis in Ukraine have sent technology firms, internet providers and credit card companies racing for the exits. But top crypto platforms have held firm on continuing to offer Russian users a potential digital haven." The government of Ukraine and U.S. Democrats have blasted crypto asset providers for operating in Russia at all, although the firms insist they're working to block sanctioned oligarchs. Sen. Elizabeth Warren (D-Mass.) said this week she's writing a bill that would block the exchanges from facilitating crypto transactions with Russian addresses. Rep. Brad Sherman (D-Calif.), a crypto critic and senior member of the House Financial Services Committee, tells Sam: "MasterCard has done it. Visa has done it. Amex has done it . In the U.S., these crypto exchanges aren't doing it. Why have they chosen to be less moral than Visa and MasterCard?" Meanwhile,President Joe Biden's executive order on digital asset policy is getting solid reviews from industry leaders, who see it as a clear signal that the White House knows that digital assets are here to stay. "The White House finally says what we and the industry have been saying for years - if the US wants to maintain its status as a responsible tech leader, it needs to provide a clear regulatory framework for an industry that's exploding in growth," Ripple CEO Brad Garlinghouse tweeted. Faryar Shirzad, the chief policy officer for Coinbase, called it a "hopeful moment " for the future of U.S. crypto policy, and the Blockchain Association's Jake Chervinsky said " it's about as good as we could ask." Biden's order now puts the onus on agencies from the Treasury Department to the Office of Science and Technology to develop a series of reports over the coming months on how lawmakers and the White House should clarify regulation of fast-evolving markets while leaving room for technical innovation. To be sure, administration officials will likely draw from existing reports on topics like stablecoins and a central bank digital currency, "but there's no doubt that this is a ton of work, and it's going to take a lot of effort to meet deadlines that are here," one official said in an interview on Wednesday. IT'S THURSDAY — Everyone ready for another scorching hot CPI report today? Don't say we (and everyone else) didn't warn you. Find any good news in the report? We want to know, and send us your tips and story ideas while you're at it, please: kdavidson@politico.com, aweaver@politico.com, or on Twitter @katedavidson and @aubreeeweaver.   A message from ExxonMobil: ExxonMobil is committed to playing a leading role in the energy transition. We're advancing climate solutions, including carbon capture and storage, hydrogen and advanced biofuels. And, by 2050, we aim to achieve net-zero emissions (Scope 1 and 2) from our operated assets. We're working with partners to achieve similar results from non-operated assets, and advocating for supportive policies to accelerate the deployment of lower-emission technologies needed to support a net-zero future. Learn more at ExxonMobil.com/Solutions   Driving The Day Peterson Institute for International Economics discussion with Ukrainian chief economic adviser Oleg Ustenko at 8 a.m. … February consumer inflation data released at 8:30 a.m. … SEC virtual meeting at 10 a.m. SEC PROPOSES NEW CYBER REPORTING REQUIREMENTS — Our Katy O'Donnell: "The move comes amid a heightened threat of cyberattacks by Russia in retaliation for broad sanctions imposed by the West over its invasion of Ukraine. Under the proposed rules, public companies would be required to report 'material' cybersecurity incidents on the 8-K form within four business days. The SEC said in a fact sheet that it has tried to get companies to disclose such incidents since 2011 but that disclosure practices remain "inconsistent." CONGRESS IS GIVING THE IRS A RAISE — Our Aaron Lorenzo: "The agency would get 5.7 percent more under omnibus legislation released early Wednesday morning, compared with its current appropriated level of $11.9 billion, an increase supporters believe is long overdue. The planned boost comes as the IRS remains mired under a mountain of unprocessed tax returns and other taxpayer mail dating to last year, which has held up refunds for individuals, credits for businesses and more well into this year's tax filing season." TAIWAN WANTS IN ON BIDEN'S INDO-PACIFIC ECONOMIC FRAMEWORK — Our Doug Palmer: "Taiwan is increasing its pressure on the Biden administration to decide whether or not it can join the proposed Indo-Pacific Economic Framework the United States plans to negotiate in the region. "We would like to participate in this framework, and we believe our participation will further strengthen this framework," said John Deng, Taiwan's minister in charge of trade negotiations, on Wednesday during a virtual event organized by the Brookings Institution. "Taiwan would like to be a full member." MASSAD PROPOSES TREASURY DIGITAL ACCOUNTS — The Brookings Center on Regulation and Markets is out with a new paper today by former CFTC Chair Tim Massad and Harvard Law Professor Howell Jackson that proposes the creation of digital accounts by the Treasury Department. Treasury "could, relatively quickly, create digital accounts to provide payment services that would be especially valuable to unbanked and underbanked individuals," they argue. "These accounts might not possess all the technological advances of a full-blown [central bank digital currency], but they would be much easier to establish and could be implemented now under existing statutory authority."   SUBSCRIBE TO NATIONAL SECURITY DAILY : Keep up with the latest critical developments from Ukraine and across Europe in our daily newsletter, National Security Daily. The Russian invasion of Ukraine could disrupt the established world order and result in a refugee crisis, increased cyberattacks, rising energy costs and additional disruption to global supply chains. Go inside the top national security and foreign-policymaking shops for insight on the global threats faced by the U.S. and its allies and what actions world leaders are taking to address them. Subscribe today.     Ukraine RUSSIA'S RUBLE CONTINUES ITS SLIDE AS NEW CURBS RESTRICT ACCESS TO FOREIGN CURRENCY — NYT's Eshe Nelson: "Russia's currency continued its descent on Wednesday as trading in the ruble was restarted on the Moscow Exchange. But in an effort to stanch the currency's decline, the Russian central bank issued an order further restricting access to U.S. dollars. "The Central Bank of Russia said on Wednesday that owners of foreign-currency accounts in Russian banks would be allowed to withdraw only up to $10,000 in dollars (regardless of the currency in the account), and that the rest would have to be taken out in rubles. New foreign-currency accounts can be opened, but only rubles will be permitted to be withdrawn." BIDEN ENLISTS CONSUMERS TO PUT SQUEEZE ON RUSSIA'S ECONOMY — Bloomberg's Saleha Mohsin: "The Biden administration is leaning on American consumers to help pay the price of its rapidly intensifying economic pressure campaign against Russian President Vladimir Putin. The White House's announcement Tuesday to ban U.S. imports of Russian fossil fuels marked the latest move against Russia. It also made for another way for the war in Ukraine to affect Americans at filling stations and grocery-store checkout lines."   A message from ExxonMobil:   Economy POWELL'S FED SET TO ATTEMPT A RARE SOFT LANDING — Bloomberg's Rich Miller: "In January 2009, Captain Chesley 'Sully' Sullenberger safely piloted his crippled US Airways plane to an emergency landing in the frigid waters of the Hudson River, saving all 155 on board. They called it the 'Miracle on the Hudson.' Now, Federal Reserve Chair Jerome Powell is about to attempt his own tricky touchdown : curbing inflation that's running at 40-year highs without crashing the economy into a recession by raising interest rates just enough to cool demand, not kill it. It's something the Fed has arguably pulled off perfectly just once, in 1994-95, when Alan Greenspan was at the controls." LABOR MARKET VERY TIGHT, JOB OPENINGS NEAR RECORD HIGH IN JANUARY — Reuters' Lucia Mutikani: "U.S. job openings fell in January, but remained near record highs as worker shortages persisted, pointing to a tight labor market that will continue to generate strong wage gains and contribute to keeping inflation high. Job openings, a measure of labor demand, dropped 185,000 to 11.263 million on the last day of January, the Labor Department said on Wednesday in its monthly Job Openings and Labor Turnover Survey, or JOLTS report." BIDEN'S INFLATION PLAN UPENDS THINKING ON JOBS SENT OVERSEAS — AP's Josh Boak: "President Joe Biden has a solution for high inflation that seems counterintuitive:Bring factory jobs back to the U.S. "This challenges a decades-long argument that employers moved jobs abroad to lower their costs by relying on cheaper workers. The trend contributed to the loss of 6.8 million U.S. manufacturing jobs since 2000, but it also translated into lower prices for consumers and put downward pressure on inflation in ways that kept broader economic growth going. It was a trade-off that many corporate and political leaders were privately comfortable making. "Now, with inflation at a 40-year high, the president has begun to argue that globalization is stoking higher prices."   STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today.     Fly Around Stocks rallied and oil prices fell sharply Wednesday as the big swings shaking global markets go in both directions amid uncertainty about the war in Ukraine. — AP's Stan Choe, Damian J. Troise and Alex Veiga Although a close partner to Washington in Middle Eastern security matters, Dubai has in recent years also become a popular playground for the Russian rich, in part because of its reputation for asking few questions about the sources of foreign money.   A message from ExxonMobil: ExxonMobil is committed to playing a leading role in the energy transition and advancing climate solutions while continuing to power economies around the world. We're investing $15 billion in lower-emission technologies, including carbon capture and storage, hydrogen and advanced biofuels, through 2027. By 2050, we aim to achieve net-zero emissions (Scope 1 and 2) from our operated assets, backed by a comprehensive approach with detailed emission-reduction roadmaps. And where we are not the operator, we're also working with partners to achieve similar results and help them reach their emission reduction goals. We're advocating for supportive policies, such as a price on carbon, which can help reduce costs and drive new markets to accelerate deployment of key lower-emission technologies needed to support a net-zero future. Learn more about our plans and how our strategy is resilient under the International Energy Agency's Net Zero Emissions by 2050 scenario at ExxonMobil.com/Solutions     Follow us on Twitter Mark McQuillian @mcqdc Kate Davidson @KateDAvidson Aubree Eliza Weaver @aubreeeweaver Ben White @morningmoneyben Victoria Guida @vtg2 Katy O'Donnell @katyodonnell_ Zachary Warmbrodt @Zachary   Follow us

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