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Nightmare On K Street – Fireworks From 4th To Fall With Fiscal Cliffs

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Cowen Washington Research Group’s Chris Krueger chats with JAG Public Affairs’ Jonathan Grella to discuss COVID-19 relief legislation, the latest 2020 election analysis (including Biden’s Veepstakes), as well as Supreme Court retirement rumors


Speaker 1:                       Welcome to our new podcast series, Street Cred, powered by Cowen’s Washington Research Group. Our resident policy pirates are planning to release interesting, insightful episodes weekly, spanning key issue areas. We landed on the title Street Cred since Cowen’s Washington Research Group lives at, and you could argue lives for, that all-important intersection of Wall Street and K Street. In the coming weeks and months, you’ll hear regularly from [Jarrett Siebert 00:00:29], hosting the aptly named Tip [00:00:30] of the Siebert, Rick Wessenstein, conducting your monthly checkup, and Chris Krueger, as the dashing leading man in Nightmare on Kay Street.

                                         Since we’re covering health and biotech, financial and housing, trading tax, as well as political analysis, you could say that this new podcast series will keep you healthy, wealthy, and wise, but only if you rate, subscribe, and tell a friend about Street Cred.

Chris Krueger:                 [00:01:00] Hello, and welcome to my nightmare. Nightmare on K Street, where I, Cowen’s Chris Krueger, will attempt to translate K Street to Wall Street faster than a speeding [Asala 00:01:13].

Speaker 1:                       On today’s episode, Chris will give you the latest on COVID relief efforts going on at Capitol Hill, give you an update on the 2020 presidential elections, including the vice presidential selection process, and even tease some Supreme Court retirement realtors.

                                         Welcome back, Chris. I would say what’s [00:01:30] going on, but what isn’t going on? Let’s kick it off with the Sharpener.

Chris Krueger:                 Right. The Sharpener. One thing listeners need to know about what’s going on, or not, in Washington, we’ll go with the earlier. We believe the final Phase Four bill will be concluded by the end of the month. We’re looking at a three-part targeted bill totaling, approximately another trillion dollars onto the national debt. The three components, number one, approximately $500 billion in [00:02:00] aid to the states and municipalities. Number two, a liability shield for businesses, schools, houses of worship, et cetera, for COVID-19 related claims. And then finally, number three, probably the most controversial, what to do with that July 31 fiscal cliff, the unemployment insurance benefits, which expire at the end of this month, $600 per week for approximately 31 million Americans. Our base case is that that’s probably shrunk in half [00:02:30] to about $300 per week. You could also see some income stabilizers basing those payments off of state unemployment levels, and maybe even a back-to-work bonus in the mix, but we believe this will be the fifth and final bill related to the pandemic and recession before the elections in November.

Speaker 1:                       Let’s [00:03:00] get to the main course here. What about 2020? And let’s get your latest thinking on the race. A lot has happened in the last couple of weeks.

Chris Krueger:                 In 2020, I think bottom line, every day the election is a referendum on Trump. It’s a win for Biden. We think without a meaningful course, correction from Trump, Biden, and the Senate are on a trajectory for a blue wave. You know, the Trump campaign I think does have this three-pronged strategy that could work if Trump had [00:03:30] the precision and self-control to really dial it in, but their three prong strategy… Number one, convince voters that President Trump is better than Vice President Biden, that creating jobs is still the one area where the President holds a polling advantage overbite, and number two, lay out a narrative that Trump will be tougher than Biden on China. And finally, number three, that Trump will keep communities safer [00:04:00] than Biden, but candidly, all of Trump’s conduct over the past couple of weeks hasn’t focused on any of those three things.

                                         In our opinion, Trump seems increasingly disconnected from, from the body politic and really has this sort of tenure and lack of self control on these enormous issues sweeping the, country. So I think there’s still time to execute on that three-point plan, though nothing we’ve seen suggests that Trump can [00:04:30] refocus and stay out of his own way for the next 17 weeks.

Speaker 1:                       Tis the season for veepstakes. Chris, would you break down Joe Biden’s calculation for who he’s going to pick as his running mate, obviously has declared that he’s going to pick a female for his vice presidential candidate. There’s some thinking, obviously, [00:05:00] that he would pick up minority woman, which really refines the universe of possibilities down to just a few folks. So please, your thoughts on that.

Chris Krueger:                 So on the vice-presidential pick, I think more than anything, it’s governed by a political Hippocratic oath, right? Do no harm. So most picks tend to gravitate towards a safe pick, and the safe pick is still probably Senator Kamala Harris from California. I [00:05:30] think there are probably three other candidates in sort of tier one, Congresswoman Val Demings from Orlando, she was an impeachment manager in the house, also the former Orlando police chief. Then you have the Atlanta mayor, Keisha Bottoms, who unfortunately just tested positive for COVID-19, but I think she was an early supporter of Biden’s candidacy, Georgia increasingly looking like it could be competitive. [00:06:00] And I think finally I’d say Tammy Duckworth, Senator from Illinois, Purple Heart recipient, combat amputee, is someone whose stature has really increased over the past couple of weeks with the Russia [Bountygate 00:06:15] scandal, and I think that could also be an interesting pick.

                                         But those are the big four. Obviously Amy Klobuchar has taken herself out of the running, so I think those are probably the four to watch and we expect [00:06:30] that pick in the coming weeks.

Speaker 1:                       Last but not least, the Tightener. Please send us off with some wisdom about what we might see around the bend.

Chris Krueger:                 You know, there’s a long way to go, but you’re continuing to hear more chatter about another potential Supreme Court vacancy. Think most [00:07:00] going into the year would have thought that that could have been Clarence Thomas, but there’s increasing commentary that Justice Alito might be stepping down. So why would Alito step down? Well, he’s 70 plus, and I think he would want to avoid an RBG scenario where if he’s looking at the polling, he’s looking at maybe the Senate flipping and being locked in that seat for another four years. Now, this could be the course correction that Trump needs to really juice conservative [00:07:30] turnout, and really focus the election. Once again, as it was in 2016, on the fate of the court judges continuing to be one of the president and Republican senates, great achievements for right or wrong confirming their 200th federal judge last week. So that’s something to keep an eye on that could be a meaningful potential for a course correction in this race that will end on November 3rd.

Speaker 1:                       As much of [00:08:00] a chore as it would be to confirm a new Justice at this time, it might recenter the debate and refocus the debate for McConnell and Trump, and they probably wouldn’t mind it all that much considering how things are going. Very, very interesting stuff, Chris, thank you very much.

Chris Krueger:                 Always a pleasure, and we’ll hopefully be back next week. Thanks so much for listening, the pleasure has all been on this side of your earbuds. This has been Cowen’s Chris Kruger, letting you [00:08:30] know this wasn’t a dream. This has been Nightmare on K Street.

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