Who finance pros say should replace Biden if the president steps aside

 

 

Stock market watchers quickly made their own lists of possible replacements for Joe Biden after the president delivered a debate performance last Thursday that amplified concerns about his fitness for a second term.

They range from the obvious — Vice President Kamala Harris — to less-obvious but more business-friendly choices such as Commerce Secretary Gina Raimondo.

These names being floated by these finance pros share many similarities with lists being circulated by those in the political world.

But there are also some differences that are instructive about the current state of the Biden administration’s relationship with corporate America — and which of Biden’s allies have made inroads among C-suites.

"I think you have to start with the vice president," said Brian Gardner, Stifel chief Washington policy strategist, noting her built-in advantages as the current second in command. "Then I think it's a very open field."

What those in the business world overall say they want is stability and a replacement that wouldn’t unsettle markets this year as well as in 2025 and beyond.

For his part, Biden and his close allies have repeatedly and forcefully said in recent days that he has no intention of stepping aside. That has only minimally tamped down the speculation after his halting performance.

"There's not a clear replacement at hand," Clayton Allen, Eurasia Group director for the United States, said in a Yahoo Finance video interview on Friday, noting that any choice risks turning off "big parts of the Democratic coalition."

The 81-year-old president has delivered a series of more forceful speeches in the days since the debate that tamped down some of the concerns, as did supportive messages from figures like Barack Obama and Bill Clinton.

Biden is at Camp David until Monday evening for a pre-planned visit with family where, according to multiple reports, he is having discussions about the next steps for his campaign.

Outreach to CEOs
A name near the top of lists of both political and financial professionals is Harris. The vice president is clearly in a strong position as Washington’s current number No. 2 with the support of many wings of the Democratic coalition.

In a recent note to clients, AGF Investments chief US policy strategist Greg Valliere called Harris "not necessarily a shoo-in for the nomination" given a list of weaknesses but called her nonetheless "the early favorite to replace Biden" if the president chooses to step aside.

The mentions of Harris are an indication of her strong position within the party but also, to some extent, her outreach to CEOs.

In March, Harris had lunch with JPMorgan Chase (JPM) CEO Jamie Dimon as part of a regular series of meetings with business leaders she has been conducting.

Then Harris visited the US Chamber of Commerce in Washington in May, where she met with a series of business leaders including Mastercard (MA) CEO Michael Miebach and Microsoft (MSFT) vice chair and president Brad Smith.

In a deeper look at her CEO "charm offensive" published just a few days before the debate, Bloomberg described Harris as "offering an olive branch" to a community wary of Biden.

Another Biden-world figure garnering at least a few mentions is Raimondo, the secretary of the Commerce Department.

The former Rhode Island governor has outlined to Yahoo Finance in the past just how much time she spends on the phone taking the temperature of the business community. She said it's an essential part of her role as Commerce secretary.

Raimondo has also garnered praise for her stewardship of key Biden economic programs, especially the implementation of the 2022 CHIPs and Science Act that is in the process of sending billions to revamp the semiconductor industry.

"A lot of businesses like her," noted Renaissance Macro’s Steve Pavlick in a Yahoo Finance interview.

Her name has also popped up on other lists, including that of New York Times columnist Nicholas Kristof, who described her as one of the figures who "would be in a good position to defeat Trump."

Raimondo was prominent on the list of candidates compiled by the Economist and even above other names more often mentioned in political circles, like Michigan Governor Gretchen Whitmer.

What is perhaps being overlooked are the criticisms Raimondo would likely take among the Democratic base for being too friendly with business.

As just one example, Sen. Elizabeth Warren has sent Secretary Raimondo a series of letters in recent months around issues like Big Tech and trade that have often raised concerns about whether Raimondo (who had a career in finance before entering politics) was too open to business concerns.

There is a name recognition issue.

Raimondo may be well known in C-suites, but a recent poll from Blueprint 2024 found that 85% of Americans have no opinion of her one way or the other, making her one of Biden’s cabinet members with the least national name identification.

In a note Monday, Eurasia Group president Ian Bremmer highlighted that a key hurdle for Raimondo and Whitmer (as well as Transportation Secretary Pete Buttigieg) is that "they’re all only modestly popular and untested on the national stage."

Other names — and new pledges by Biden to stay in the race
The business world lists also include a range of figures top of mind to the political world as well.

California Governor Gavin Newsom is clearly in contention, but observers note he is currently facing a contentious budget debate in California that could hamper his chances.

Two other battleground state governors, Michigan's Whitmer as well as Josh Shapiro of Pennsylvania, are also often mentioned. As is Illinois Governor J.B. Pritzker and others.

All of this speculation is, of course, moot if Biden stays in the race, as he has repeatedly pledged to do.

His political allies and family members — not to mention nearly every Democratic elected official as well as candidates being listed to replace him — have repeatedly this week tried to excuse last week's debate performance and blame other factors.

As for the president’s discussion at Camp David this weekend, a New York Times report painted a picture of conversations with family members who are urging him to fight on.

And as Harris herself put it during a CNN appearance immediately after the debate, Biden had a "slow start" but "a strong finish."