Overnight Finance: House rejects financial adviser rule; Obama rebukes Sanders on big banks

GDP GROWTH KINDA DISAPPOINTING: The U.S. economy grew at its slowest pace in roughly two years, climbing just 0.5 percent in the first three months of 2016.

The U.S. economy reported subpar numbers in the first quarter for the third straight year. Economists surveyed by Bloomberg had predicted 0.7 percent growth.

{mosads}The Commerce Department said the low growth was due to a pullback in spending by both businesses and consumers as the first few months of 2016 were filled with anxiety about the state of the global economy. The economy grew 1.4 percent in the last quarter of 2015.

While the U.S. has consistently reported solid gains in categories like jobs and housing, there has been growing anxiety about the impact of a steep decline in oil prices on oil-producing nations. And growing concern about an economic slowdown in China has exacerbated the situation. The Hill’s Peter Schroeder explains: http://bit.ly/1pLjLMc.

GOP BLASTS OBAMA ON SLUGGISHNESS: Republicans seized on a disappointing economic report Thursday to begin a fresh round of criticism of President Obama.

The Commerce Department reported Thursday that the U.S. economy grew just 0.5 percent in the first three months of the year, beneath economists’ already low expectations.

GOP lawmakers were quick to point the finger at the president’s policies as a reason for the slowdown.
“That’s next to nothing,” said Speaker Paul Ryan (R-Wis.) Thursday. “We do not have to settle for 0.5 percent economic growth.”

“President Obama’s legacy is likely to make the Carter years look rosy by comparison,” said Sen. Tom Cotton (R-Ark.). “It’s no wonder presidential candidates of both parties are running against the disastrous economy of the last eight years.” http://bit.ly/1T8a8ih.

HOUSE REJECTS FINANCIAL ADVISER RULE: The House voted Thursday to strike down a controversial rule for financial advisers.

Lawmakers voted 234-183 along party lines to overturn the Labor Department’s fiduciary rule, which requires financial advisers to act in the best interest of retirement savers.

The rule has set the stage for a bitter partisan dispute over retirement savings.
The GOP is using a legislative tool provided under the Congressional Review Act to disapprove of the rule. But President Obama has vowed to veto their efforts.

Republicans argue the rule will raise costs so much that low-income people will no longer be able to afford investment advice.

Rep. Phil Roe (R-Tenn.), who is sponsoring the legislation to repeal the fiduciary rule, said his bill would “protect access to affordable retirement advice.”

“I don’t think anyone believes [the fiduciary rule] is going to make it easier for people to retire in this country,” he said. “Life expectancies are going up, so we should be doing everything we can to help people save for retirement.”

Most Democrats support the fiduciary rule because they say it will bring more transparency to the process of saving for retirement and stop fiduciaries from offering conflicted advice. The Hill’s Tim Devaney tells us more: http://bit.ly/1QDwxSX.

LABOR CHIEF KNOCKS GOP ‘WASTE OF TIME’: Labor Secretary Thomas Perez is sounding a warning to the Republicans trying to dismantle the Obama administration’s tougher new rules for retirement savings advisers.

“President Obama has said forcefully that if this resolution were to come to his desk, he will veto. Not ‘might veto it.’ He will veto it,” Perez said Thursday in the Capitol. “So this is, frankly, a waste of time today, what the Republicans are doing.”

Perez was referring to the Republicans’ resolution to disapprove the new regulations, known as the fiduciary rule, which requires investment advisers to act solely in the interest of their clients. The Hill’s Mike Lillis takes us there: http://bit.ly/1VWPOqu.

JOBLESS CLAIMS TICK UP BUT IT’S ACTUALLY OK: First-time claims for jobless benefits rose last week but remain near historically low levels as employers hang on to their workers amid slow economic growth.

Weekly unemployment benefits applications increased by 9,000 to a seasonally adjusted 257,000, up from the lowest level since November 1973, the Labor Department reported on Thursday.

The four-week average, which is a better indicator of the job market’s health, dropped 4,750 to 256,000 last week, a 42-year low.

Applications have held below 300,000 for 60 straight weeks, the longest stretch since 1973.

But the economy expanded at an anemic 0.5 percent rate in the January-March period, the slowest pace in two years. The Hill’s Vicki Needham breaks it down: http://bit.ly/1SCk6ct.

HAPPY THURSDAY and welcome to Overnight Finance, where we’re mentally and physically preparing ourselves for a star-studded weekend. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

Tonight’s highlights include squabbling between Obama and Bernie on big banks, a tax bill protecting anonymous donors and more trouble with the energy funding bill.

See something I missed? Let me know at slane@digital-stage.thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.

OBAMA REBUKES BERNIE ON BREAKING UP BIG BANKS: President Obama is defending his handling of the financial crisis from Democratic presidential candidate Bernie Sanders and others on the left who say the White House’s Wall Street reform plan did not go far enough.

“It is true that we have not dismantled the financial system, and in that sense, Bernie Sanders’s critique is correct,” Obama said in an interview with The New York Times Magazine published online Thursday.

Sanders, a self-described democratic socialist, has repeatedly called on America’s biggest banks to be broken up, a call that has galvanized his liberal supporters.
Obama suggested that such a plan is unrealistic.

“But one of the things that I’ve consistently tried to remind myself during the course of my presidency is that the economy is not an abstraction,” he said. “It’s not something that you can just redesign and break up and put back together again without consequences.” The Hill’s Jordan Fabian has more: http://bit.ly/1pLjHwf.

SENATE WAR OVER ENERGY BILL: Senate Majority Leader Mitch McConnell (R-Ky.) ripped into Democrats Thursday for blocking an energy bill, telling them: “Do your job.”

“They couldn’t wait a single week before throwing an obstructionist wrench into the appropriations process they claim to want,” he said Thursday. “I hope they’re not dusting off the old filibuster summer playbook, especially in light of the letter they just sent to me about win-win opportunities and restoring regular order.”

McConnell responded after Democrats blocked the Senate from moving forward on the energy and water appropriations bill Wednesday because of their concerns about an Iran-related amendment from Sen. Tom Cotton (R-Ark.).

Cotton’s amendment would prevent the government from purchasing Iran’s heavy water, which can be used in nuclear reactors. Though the measure isn’t currently scheduled to get a vote, Democrats warn that its inclusion could lead to the president vetoing the overall bill. The Hill’s Jordain Carney explains what’s going on: http://bit.ly/1NDSJSj.

HOUSE SENDS TRADE SECRETS BILL TO OBAMA: The House on Wednesday easily passed a measure that would provide a federal remedy for U.S. companies seeking relief from the theft of trade secrets.

The vote of 410-2 clears the measure for President Obama’s signature, wrapping up about two years of work to craft the measure aimed at harmonizing federal law and giving businesses more consistent legal protections when their trade secrets are stolen.

The Senate passed the measure on an 87-0 vote on April 4.

House Judiciary Committee Chairman Bob Goodlatte (R-Va.), whose committee approved the measure by voice vote last week, said that trade secrets include everything from Kentucky Fried Chicken’s secret spices to Coca-Cola’s soda formula and algorithms for search engines like Google.

The measure would “build on efforts over the past two years and take a significant and positive step toward improving our nation’s trade secret laws and continuing to build on our important work in this area of intellectual property,” Goodlatte said on the House floor: http://bit.ly/1qZhApm.

HOUSE PANEL MOVES BILL TO LIMIT IRS TRACKING OF DONORS: The House Ways and Means Committee approved three bills Thursday it says are aimed at protecting taxpayers and children.

“Simply put, these proposals put the best interests of children and taxpayers first,” Chairman Kevin Brady (R-Texas) said.

The most controversial of the measures, which passed on a party-line vote, would generally ban the Internal Revenue Service from collecting the identities of donors to tax-exempt organizations.

Under current law, such organizations have to disclose to the IRS the identities of donors who give more than $5,000. The bill would prevent the IRS from requiring this disclosure, with the exception of donations of more than $5,000 from officers, directors and certain employees.

Rep. Peter Roskam (R-Ill.), who introduced the bill, said that while the information on the disclosure form is not supposed to be released to the public, it has been improperly released it in the past.

He added that the current disclosure document is “burdensome” and not needed for tax administration. The IRS has indicated that it was considering eliminating the requirement. The Hill’s Naomi Jagoda explains: http://bit.ly/23aJmeE.

HOUSE PASSES FLOOD INSURANCE REFORM: After a two-day delay, the House passed a bill Thursday evening to loosen restrictions on private flood insurance, which is geared to ease the burden on a debt-ridden federal program.

The Flood Insurance Market Parity and Modernization Act, introduced by Reps. Dennis Ross (R-Fla.) and Patrick Murphy (D-Fla.) and backed by a large portion of the Florida delegation clarifies that privately issued flood insurance policies meet a federal requirement for homes in flood-prone areas. It was passed unanimously out of the House Financial Services Committee in March.

The legislation was introduced in June 2015, but deadly floods devastated the Midwest and Southwest during the December holidays pushed the committee to move quickly.

The bill is intended to relieve pressure on the National Flood Insurance Program (NFIP), which issues most flood insurance policies in the United States. Established in 1968, the program remained solvent until Hurricane Katrina in 2005 and superstorm Sandy in 2012 sunk NFIP in $23 billion in debt.

NIGHTCAP: People are selling rain from the day Prince died because nothing matters and everything has a price.

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