Wall Street Democrats Distancing Selves From Georgia Runoff To Avoid Biden Tax Hikes

The prospect of Democrats regaining control of the Senate following Jan. 5 runoff elections in Georgia has caused some deep-pocketed Wall Street Democrats to secretly wish defeat on their party’s candidates, according to Bloomberg.

The reason? Biden’s plan to raise taxes will directly impact them.

Employees of securities and investment firms poured about $77 million into President-elect Joe Biden’s campaign and the super-PACs supporting him, more than quadruple what they steered toward Trump. But the pair of Democrats facing runoff elections in Georgia against Republican senators David Perdue and Kelly Loeffler on Jan. 5 are unlikely to see such lopsided support — even with control of the chamber at stake.

For Wall Streeters, keeping the Senate in Republican hands means thwarting tax hikes for corporations and capital gains, as well as other policies that don’t align with their financial interests. –Bloomberg

“Most Wall Street Democrats and certainly all Wall Street never-Trumpers — Republicans that voted for Biden — want a split government,” says Hedge Fund manager Mike Novogratz, founder of Galaxy Digital.

Novogratz says he’s received a lukewarm response to fundraising emails for Democrats Jon Ossoff and Raphael Warnock. The hedge fund manager co-founded a group which involves former presidential candidate Andrew Yang (D)  and Stacey Abrams, the former House Minority leader in Georgia who refused to concede a 2018 gubernatorial race.

“I got a lot of ‘Thanks, but no thanks,’ or ‘What are you talking about?’ from guys I know voted for Biden,” Novogratz told Bloomberg.

The Democrats, Ossoff and Warnock, seek to unseat Republican Senators David Perdue and Kelly Loeffler. If this happens, Democrats would hold 50 seats in the Senate, making presumptive Vice President-elect Kamala Harris the tie-breaker on contentious votes.

A prominent Wall Street Democrat who gave generously to Biden confided he hasn’t yet contributed to the Georgia races. The donor, who asked not to be identified, said he’s skeptical a Democratic sweep would matter much anyway because certain Democrats would block more progressive tax legislation.

Some are also put off by the challenge of flipping two seats, a view already visible as markets price in the likelihood of a Republican majority, according to one Democratic operative who predicts turnout for the party will sag without Biden on the ballot. –Bloomberg

On Thursday, we may have our first glimpse at who’s donating to who, when party committees and super-PACs like the Mitch McConnell-linked Senate Leadership Fund report their donors to the Federal Election Commission. Campaigns will similarly file with the FEC on Dec. 24.

Wall Street Democrats, meanwhile, are also hesitant to join a push to saturate Georgia’s airwaves with ads ahead of the runoff, which has seen approximately $259 million in paid advertising booked so far on both sides of the aisle, according to AdImpact data ending Friday.

Warnock’s campaign is the biggest spender at $45.7 million, while Loeffler has booked $38.4 million of ad time. In the other race, Ossoff’s ad buys total $42.7 million, compared with $28.8 million for Perdue. Republicans, including super-PACs and party committees, are outspending Democrats in Georgia $156.7 million to $101.9 million. –Bloomberg

“I don’t think the four candidates can actually spend the amount of money that’s going to be raised,” says Signum Global chairman Charles Myers, a Biden bundler. “It just shows how crazy, and how corrupted money and politics are, frankly.”