Wall Street loses a good friend in Eric Cantor
Eric Cantor’s coming exit from Congress means that Wall Street will lose a key ally on Capitol Hill.
Cantor, the second-ranking Republican in the House of Representatives, received significant support from financial firms and was known as a leading industry ally on related regulation.
“The majority leader is someone the financial industry has always been able to work with on complicated and politically challenging issues, and his loss is a loss for the industry,” said Podesta Group principal Andy Lewin, who lobbies on financial services issues. “Someone in leadership will fill the vacuum the majority leader leaves behind, but there’s no doubt that this is a big short-term loss.”
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Observers say that some legislation that Cantor supported is now less likely to become law.
One is immigration reform, which Goldman Sachs and other financial firms have championed to benefit their highly skilled workforce. Two others are more niche, including extending the Export-Import Bank of the United States’ charter and the Terrorism Risk Insurance Act.
“I thought it was stunning … Eric Cantor was a sensible politician,” Goldman Sachs CEO Lloyd Blankfein told CNBC on Wednesday. “I hope it doesn’t mean that it will be impossible from this point forward to compromise on issues like the budget, on immigration policy, or any other issues that are wracking the country.”
Blankfein hinted that Cantor’s potential replacement, tea party-affiliate David Brat, wouldn’t be as practical.
“At the end of the day, I don’t look forward to a time when every legislator goes to Washington absolutely committed to an extreme point of view and we can never resolve anything,” Blankfein said. “This is not necessarily a good signal.”
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Goldman Sachs was Cantor’s third-largest financial supporter this election cycle, behind private equity giant Blackstone Group and hedge fund firm Scoggin Capital Management. There were plenty of other financial firms among Cantor’s recent supporters, as shown in this chart:
Cantor’s loss wasn’t for lack of money.
“In Majority Leader Cantor’s loss Tuesday, Wall Street and the entire financial sector lost the their No. 2 investment among House candidates this cycle,” said Sheila Krumholz, executive director of the nonpartisan political funds tracker Center for Responsive Politics.
“In fact, Wall Street was the top industry funding Cantor’s campaigns during his entire House career, including this cycle, and—looking more broadly—finance was his top sector. Given his financial advantages, no one attributes Cantor’s loss to insufficient resources.”
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—By CNBC’s Lawrence Delevingne.