Illustration: Lazaro Gamio/Axios

Private equity's loudest political antagonists were back at it over the weekend, wrongly arguing that Taylor Swift's contract dispute is illustrative of the industry's rapaciousness.

What happened: While Sen. Elizabeth Warren and Rep. Alexandia Ocasio-Cortez each tweeted that private equity must be "reined in," they'll need to publicly wrestle at some point with how private equity is fueled by public pension systems that they otherwise support.

How it works: U.S. public pensions are the single largest investor in U.S. private equity funds, according to the most recently-available data, having hundreds of billions of dollars of exposure.

  • They've also increased their participation in direct private equity deals, often via co-investments with portfolio managers, with PitchBook reporting that 2018 saw a record number of domestic PE deals with public pension participation.

Why it matters: Any new regulation on U.S. private equity could have downstream impact on U.S. public pensions, many of which already have long-term challenges in meeting their member obligations.

  • Some changes, such as around the tax treatment of carried interest, would have a relatively small impact, if any.
  • Some changes, like Warren's plan to make PE funds liable for leveraged financing, would significantly impact public pension returns and allocation plans.

Yes, but: A popular progressive argument is that public pensions shouldn't invest in fee-heavy private equity at all, instead putting that money into public equity index funds.

  • There is some data to back this up, but it tends to ignore the value of diversification for public pensions with ongoing obligations, and imply that the past decade's bull run for public equities is normal.

The bottom line: Private equity and public pensions are tightly interconnected. To see the change they want, Warren and AOC may ultimately need to focus less on Taylor and Twitter, and more on the public pension leaders who represent part of their base.

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Updated 54 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 3 a.m. ET: 32,844,146 — Total deaths: 994,208 — Total recoveries: 22,715,726Map.
  2. U.S.: Total confirmed cases as of 3 a.m. ET: 7,078,798 — Total deaths: 204,497 — Total recoveries: 2,750,459 — Total tests: 100,492,536Map.
  3. States: New York daily cases top 1,000 for first time since June — U.S. reports over 55,000 new coronavirus cases.
  4. Health: The long-term pain of the mental health pandemicFewer than 10% of Americans have coronavirus antibodies.
  5. Business: Millions start new businesses in time of coronavirus.
  6. Education: Summer college enrollment offers a glimpse of COVID-19's effect.

Graham hopes his panel will approve Amy Coney Barrett by late October

Sen. Lindsey Graham during a Senate Judiciary Committee hearing on Sept. 24, 2020 in Washington, DC. Photo: Win McNamee/Getty Images

Senate Judiciary Committee Chair Lindsey Graham (R-S.C.) told Fox News Saturday he expects confirmation hearings on Judge Amy Coney Barrett's nomination to the Supreme Court to start Oct. 12 and for his panel to approve her by Oct. 26.

Why it matters: That would mean the final confirmation vote could take place on the Senate floor before the Nov. 3 presidential election.

Texas city declares disaster after brain-eating amoeba found in water supply

Characteristics associated with a case of amebic meningoencephalitis due to Naegleria fowleri parasites. Photo: Smith Collection/Gado/Getty Images

Texas authorities have issued a warning amid concerns that the water supply in the southeast of the state may contain the brain-eating amoeba naegleria fowleri following the death of a 6-year-old boy.

Details: The Texas Commission on Environmental Quality issued a "do not use" water alert Friday for eight cities, along with the Clemens and Wayne Scott Texas Department of Criminal Justice corrections centers and the Dow Chemical plant in Freeport. This was later lifted for all places except for Lake Jackson, which issued a disaster declaration Saturday.

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