Overnight Finance: Sanders vows to shake up Wall Street

SANDERS’ WALL STREET AGENDA: Democratic presidential candidate Sen. Bernie Sanders (I-Vt.) pledged Tuesday to make fundamental changes to the nation’s financial system. Long a Wall Street critic, Sanders rolled out his agenda for breaking down big banks, curbing interest rates and weeding out corporate influence from government.

Sanders also paid tribute to liberal icon Sen. Elizabeth Warren (D-Mass.) and called out 2016 rival Hillary Clinton, claiming her plan amounts to little more than “a few more fees and regulations.” The Hill’s Peter Schroeder has the details and some fun color from the New York speech: http://bit.ly/1VG0vL4.

The Sanders plan:

• Identify and dismantle all “too big to fail” banks in his first year in office.
• Ban anyone with Wall Street experience from serving in his administration.
• Re-impose Glass-Steagall, separating commercial banking and investment banking.
• Cap ATM fees at $2 and credit card interest rates at 15 percent.
• Turn credit rating agencies into non-profit groups.
• Allow the U.S. Postal Service to offer basic banking.

RISKY BUSINESS FOR HILLARY: As Sanders promises to sweep away the current financial system, Clinton is vowing to build on President Obama’s economic record. But new worries about international financial instability highlighted by yesterday’s stock market woes show how dangerous that pledge might be. Peter breaks down why running close to the Obama economy is risky for Clinton’s campaign: http://bit.ly/1S2t5rb.

{mosads}”Monday’s sell-off, spurred by concerns about China’s economic slowdown and tension in the Middle East, follows a raucous end to 2015 that saw several strong swings in financial markets. And it drives worry about the strength of the global economy at a critical juncture, both economically and politically. While the U.S. economy has grown steadily and unemployment has fallen, public dissatisfaction with the economy lingers, thanks in large part to stagnant wages and growing income inequality.

“‘The one thing that everybody’s been waiting for is that fulcrum where wages start to rise,’ said Daniel Alpert, managing partner at Westwood Capital. ‘We haven’t gotten there. We’re not getting there. It’s not happening.'”

STUDY CHALLENGES OBAMACARE CRITIQUE: While many critics and even some supporters of the Affordable Care Act claim the health care law forces more people into part-time jobs, a study published in the journal Health Affairs says that’s not true. The authors write that their study finds “no evidence consistent with the thesis that the ACA caused an overall increase in part-time employment in the United States.” The Hill’s Peter Sullivan explains: http://bit.ly/1O43bQ3.

“The law mandates that employers provide health insurance for people working 30 hours or more per week. This had sparked reports that some employers would cut hours to avoid paying out insurance. However, the study, which looks at data from the Current Population Survey, does not find evidence to support suggestions the law would have such an effect.”

HAPPY TUESDAY and welcome to Overnight Finance, where we’re mulling hibernation. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

Today’s highlights include more bad news for Puerto Rico and its financial crisis, more good news for Obama’s trade deal and some alleged miscalculations at the Consumer Financial Protection Bureau.

See something I missed? Let me know at slane@digital-staging.thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://www.digital-staging.thehill.com/signup/48.

S&P DOWNGRADES PUERTO RICO BONDS: Standard & Poor’s Rating Services dealt a blow to cash-strapped Puerto Rico on Tuesday, downgrading infrastructure bonds secured by rum taxes to default status, according to Reuters. The downgrade comes a day after Puerto Rico failed to pay almost $36 million interest payment on part of more than $1 billion in debt.

Puerto Rico Gov. Alejandro García Padilla (D) warned last week that the commonwealth would miss that payment and another $1.4 million payment to its Public Finance Corp. Now they’re waiting on a divided Congress to help them out, with House Speaker Paul Ryan committed to acting by March 31. I break down the problem here: http://bit.ly/1RpKp7W.

BUSINESSES LINE UP BEHIND TRADE DEAL: The Trans-Pacific Partnership (TPP), the massive trade deal pushed by Obama, got a major boost from a group of the nation’s chief executives. The Business Roundtable endorsed the deal Monday, shortly after the National Association of Manufacturers did so, and wants Congress to fix up remaining issues and pass the agreement quickly.

The problem? Senate Majority Leader Mitch McConnell suggested the deal won’t get a vote until after the 2016 election. The Hill’s Vicki Needham breaks down how businesses are preparing a lobbying push to grease the Congressional wheels: http://bit.ly/1kJhG0X.

“Support for the deal from Washington’s leading business groups will play a critical role in its passage. Without their backing, the TPP faces a nearly impossible journey to Obama’s desk. Momentum for the deal is even more vital in an election year, when candidates on both sides of the aisle are assailing it. …

“But most Democrats on Capitol Hill are unlikely to be persuaded by the arguments from businesses that the TPP will open more markets without hurting American workers.”

TRY TURNING IT ON AND OFF: Two Republican senators are asking the Consumer Financial Protection Bureau (CFPB) why its online retirement planning tool offers incorrect guidance to users. Sens. Mike Enzi (R-Wyo.) and Richard Shelby (R-Ala.), chairmen of the Senate Budget and Banking committees, asked the CFPB why its retirement calculator doesn’t square with one offered by the Social Security Administration (SSA) online. The senators cite inconsistencies between the two tools, both meant to aid users with retirement planning. Here’s more from me: http://bit.ly/1PIxVqc.

NIGHTCAP: More than 50,000 people tried to score $10 tickets to “Hamilton,” the blockbuster historical musical, through a lottery today. It crashed the website.

OVERNIGHT VINE-ANCE: Bernie Sanders supporters are eerily in synch with their candidate.

Write us with tips, suggestions and news: slane@digital-staging.thehill.com, vneedham@digital-staging.thehill.com, pschroeder@digital-staging.thehill.com, and njagoda@digital-staging.thehill.com. Follow us on Twitter: @SylvanLane,  @VickofTheHill, @PeteSchroeder, and @NJagoda.