Wall Street Democrats are hesitant in supporting their party’s goal of capturing the Senate majority through the Georgia runoff elections. Wall Street Democrats actively campaigned for their candidate Joe Biden to win, pouring $77 million into the campaign. In contrast, incumbent Donald Trump managed to scrounge $18 million. Given the support for Biden, will Wall Street open their wallets again to help win Georgia?
The Senate Majority is a Different Story
While the Dems celebrated the ouster of Donald Trump and the ascension of Joe Biden, the Senate race is a different story. If Dem candidates Raphael Warnock and Jon Ossoff win the Georgia race, this also means the Senate will be 50-50 in terms of Republican and Democrat composition. Fortunately for the Democrats, the Vice President will have the tiebreaker, which tips the balance in their favor.
Therefore, the stakes are bigger beyond state representation. But why are some Democrat Wall Streeters against a Democrat Senate? By itself, it’s not a bad idea. But if the Democrats get the majority, it will mean they will get the upper hand in all three branches. The White House, House of Representatives, and the Senate will fall under Democrat control. After all, a blue sweep can mean a lot of things. It can especially mean a clearer path to higher corporate and capital gains taxes. A Republican majority means a harder road for policies that do not sync with Wall Street interests.
Many Wall Street investors prefer a split government, where a party dominates two chambers and the other controls the other. Wharton Finance Professor Jeremy Siegel is among those who say that this bodes well for the market and the economy. Siegel believes better results can happen with Republican Senate majority leader Mitch McConnell working with Joe Biden. Programs like stimulus relief will still pass but will end up with smaller budgets than what Democrats want.
CNBC’s Carl Quintanilla said that the markets do better when there is a split Congress. He noted that “a gridlock doesn’t mean nothing will get done.” Instead, a divided Congress can prevent extreme changes to the law from happening. This includes any radical tax changes that Democrats plan to introduce next year. In that case, Wall Streeters agree. Mike Novogratz, the founder of Galaxy Digital, said, “Most Wall Street Democrats and certainly all Wall Street never-Trumpers — Republicans that voted for Biden — want a split government.”
Reluctance to Donate
Novogratz said Wall Street Democrats were more reluctant to donate to Ossoff and Warnock’s campaign fund. Fundraising initiatives for #winbothseats, a drive to get people out to vote, raised a smaller amount than expected. The Galaxy Digital founder said he “got a lot of ‘Thanks, but no thanks,’ or ‘What are you talking about?’ from guys I know voted for Biden,” Novogratz said. Despite the setback, Novogratz managed to raise $2 million for #winbothseats and another organization.
A Wall Street Democrat who requested anonymity confessed that he has yet to contribute to the Georgia Senate race. He said he doesn’t think Democrat sweep matters much, and a Blue Sweep is unnecessary. According to him, there will be Democrats opposed to progressive tax legislation anyway.
Money Doesn’t Guarantee Victory
With so much at stake, Wall Street is unanimous in saying the money will still flow on both sides. However, more money doesn’t mean a surefire victory. Democrats with a fundraising advantage fell short in unseating Republican incumbents in Iowa, Kentucky, Maine, North Carolina, South, and South Carolina.
For the Senate race, Wall Street donors favor incumbents. The industry gave more to Republican candidates in Georgia this year. Perdue raised $1.3 million versus half that for Ossoff. Warnock raised almost $300,000 more than Loeffler, but the latter got more outside. Husband Jeffrey gave $5.5 million to a Super PAC helping her. Another $3 million came in from Citadel founder Ken Griffin for the same PAC.
Democrats did spend more on ads. Warnock’s campaign shelled out $45.7 million versus Loeffler’s $38.4 million. Ossoff spent almost $13 million more than Perdue in ad spots, $42.7 million compared to Perdue’s $28.8 million. Although, if you include super-PACs and party committees, the GOP is outspending Dems, $156.7 million to $101.9 million.
Watch as CNBC News reports that big money is pouring into Georgia’s Senate run-off elections:
Do you support a Republican majority in the Senate? Or do you prefer a Democrat Blue Wave? Let us know what you think of the race for Senate control by commenting below.