SPONSORED:

Overnight Finance: Dow hits record high | CBO's dire debt warning | McConnell casts doubt on 2016 trade vote | Chamber pitches Fed reform plan

Reid: McConnell 'stringing us along' on Zika: Senate Minority Leader Harry ReidHarry Mason ReidWhite House races clock to beat GOP attacks Harry Reid reacts to Boehner book excerpt: 'We didn't mince words' The Memo: Biden seeks a secret weapon — GOP voters MORE (D-Nev.) ripped Republicans over a stalemate on Zika funding Tuesday, the latest sign the issue will likely be punted into the fall.  

"It's clear that the Republican leader [Kentucky Sen. Mitch McConnellAddison (Mitch) Mitchell McConnellTrump: McConnell 'helpless' to stop Biden from packing court Senate GOP opens door to earmarks McConnell sidesteps Trump calling him 'dumb son of a b----' MORE] has been stringing us along. He never had any intention of coming back to the negotiating table," Reid said from the Senate floor. "Republicans have no desire to work with us ... now, or any time in the future. It's all been a charade."

ADVERTISEMENT

Reid's comments came after Sen. Bill NelsonClarence (Bill) William NelsonWhy does Rep. Johnson oppose NASA's commercial human landing system? Trump hands Rubio coveted reelection endorsement in Florida Overnight Defense: Top House Armed Services Republican talks National Guard at Capitol, Afghanistan, more | Pentagon chief visits Afghanistan amid administration's review | Saudis propose Yemen ceasefire MORE (D-Fla.) and McConnell tried to resurrect dueling Zika proposals. Both were blocked for the second time this week.

McConnell is expected to try to pass the same legislation again, a deal with the House to provide $1.1 billion to fight the virus. Democrats want another bill with the same amount of funding but which doesn't include policy riders targeting Planned Parenthood or redirecting Ebola funds.

The Kentucky senator has said for weeks that the House-backed agreement is the only path to passing legislation this month. The Hill's Jordain Carney tells us why: http://bit.ly/29NsZWv.

CBO: Federal debt to pass historic high in 2035: The United States is less than two decades away from exceeding its highest recorded level of federal debt, according to the non-partisan Congressional Budget Office (CBO).

The CBO projects that U.S. federal debt will pass 106 percent of the country's gross domestic product (GDP) by 2035, in its second long-term budget outlook report of 2016. That level was recorded once before, in 1946, shortly after World War II.

The current federal debt is worth 75 percent of the country's GDP. It's expected to reach 86 percent by 2026, and 141 percent by 2046.

Ballooning federal debt raises questions about U.S. economic stability and the country's capacity to pay its loans. If left unchecked, that debt could trigger a national or international economic crisis, according to the CBO. I lay out the stakes here: http://bit.ly/2a7a70v.

Dow hits record high: The Dow Jones Industrial Average closed at a new record high Tuesday.

The blue-chip stock index rose 120 points, or 0.66 percent in the day's trading, closing at 18,347 points. The S&P 500 also set a new record for the second straight day after jumping 0.7 percent Tuesday.

Meanwhile, the Nasdaq posted similarly strong gains, and now is in positive territory for the year.

The record highs indicate investors have shaken off June's drama over Britain's stunning decision to leave the European Union.

The Dow dropped over 600 points the day after that vote, but the index erased those losses by the close of trading Friday. The Hill's Peter Schroeder tells us why: http://bit.ly/29zW3Ld.

McConnell dumps cold water on TPP vote: Senate Majority Leader Mitch McConnell (R-Ky.) on Tuesday maintained his bleak outlook that a main pillar of President Obama's trade agenda will be considered this year.

McConnell told reporters that the chances are "pretty slim" that a sweeping 12-nation Trans-Pacific Partnership (TPP) will get a vote in the Senate before the president leaves office.

In the past few months, McConnell has noted that the political environment in the Democratic and Republican presidential campaigns has made a push to pass TPP after the November elections increasingly difficult.

With fast-track authority in place for six years, McConnell has said that the TPP deal could get pushed to the next president.

But supporters of the Pacific trade agreement have acknowledged that an unfinished TPP injects too much uncertainty into the process and could kill the Pacific Rim agreement.

Democrat Hillary ClintonHillary Diane Rodham ClintonHow Democrats can defy the odds in 2022 Close the avenues of foreign meddling Pelosi planned on retiring until Trump won election: report MORE and Republican Donald TrumpDonald TrumpTrump: McConnell 'helpless' to stop Biden from packing court Romney on NRSC awarding Trump: Not 'my preference' McConnell sidesteps Trump calling him 'dumb son of a b----' MORE are opposed to the trade deal. The Hill's Vicki Needham tells us more: http://bit.ly/29CJemC.

Wharton supporters blast Trump's candidacy: More than 2,000 students, faculty and alumni of the University of Pennsylvania's Wharton business school blasted Donald Trump for promoting intolerance in his presidential campaign.

Many in the Wharton community wrote a letter to the presumptive Republican nominee and told him that they are "deeply disappointed" in his candidacy for the White House.

"We, proud students, alumni, and faculty of Wharton, are outraged that an affiliation with our school is being used to legitimize prejudice and intolerance," they wrote in an open letter posted to Medium.com.

As of Monday, 2,063 people had signed the letter.

"Your discriminatory statements are incompatible with the values that we are taught and we teach at Wharton, and we express our unwavering commitment to an open and inclusive American society," they wrote: http://bit.ly/29zY36a.

HAPPY TUESDAY and welcome to Overnight Finance, where we're begging you to be mindful of where you play Pokemon. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.

Tonight's highlights include a Federal Reserve reform plan from the U.S. Chamber of Commerce, more sparring over Donald Trump's tax returns, and a plea from emerging online lenders.

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

Activists to deliver petition urging Trump to release tax returns: Activists said they would deliver a petition Tuesday signed by more than 400,000 people urging presumptive Republican presidential nominee Donald Trump to release his tax returns.
At an event outside Trump Tower in New York, leaders of liberal-leaning groups and community members planned to press Trump to make his returns public. Speakers were slated to include representatives from Americans for Tax Fairness Action Fund and The Patriotic Millionaires.

Democrats have suggested that Trump is trying to hide something by refusing to release his returns. Some Republicans, including 2012 Republican presidential nominee Mitt Romney, have also said that Trump should release his returns.

Trump has said that he will release his returns once the IRS is finished auditing him, but the agency has said that an audit does not prevent taxpayers from releasing their own information. Here's more from The Hill's Naomi Jagoda: http://bit.ly/29zWOE2.

US Chamber pitches reform plan for the Federal Reserve: The U.S. Chamber of Commerce wants to place more checks on how the Federal Reserve regulates Wall Street.

The nation's largest business lobby rolled out a plan Tuesday that would require the Fed to consider other regulators, as well as Congress, when drafting and enforcing financial regulations.

The group argued that as the central bank exerts expanded regulatory powers thanks to the Dodd-Frank financial reform law, it should have to adhere to heightened requirements.

"The Chamber strongly believes that all regulators must be fully transparent in their deliberations and decision making, and invite and address public input as part of the policymaking process," the group said in its report. "And the Federal Reserve should be no exception."

The business group's pitch to alter the Fed's operations make it the latest in a wide range of interest groups to weigh in on the central bank's operations. From the far right to the far left, several groups are pushing changes to how the Fed operates. Peter Schroeder tells us about the Chamber's plan: http://bit.ly/29CmOAE.

IRS chief warns against abrupt impeachment vote: IRS Commissioner John Koskinen is arguing that he should get a chance to respond to the allegations against him before the House takes any further action on resolutions to impeach or censure him.

"Denying Commissioner Koskinen a full opportunity to examine the evidence against him and be heard before a House vote would leave the Members of the House without information about the merits and consequences of these measures, and would violate the principles of due process that are enshrined in our Constitution and have long been honored by you and your predecessors," Koskinen's lawyers said in a letter to House Judiciary Committee Chairman Bob GoodlatteRobert (Bob) William GoodlatteBottom line No documents? Hoping for legalization? Be wary of Joe Biden Press: Trump's final presidential pardon: himself MORE (R-Va.) and ranking member John Conyers (D-Mich.).

In recent months, the Judiciary Committee has held two hearings as part of an investigation into Koskinen's alleged misconduct. A 2013 inspector general report found that the IRS has subjected conservatives groups' applications for tax-exempt status to extra scrutiny. Naomi Jagoda brings us up to speed: http://bit.ly/29LKxk7.

Emerging online lenders ask lawmakers for time, patience: Online lenders are pleading with lawmakers for time and patience as they attempt to solve one of finance's most stubborn issues.

Marketplace lenders -- companies that specialize in small-scale commercial and consumer loans that aim to cut costs through algorithm-powered underwriting -- say they have the potential to expand credit access to millions of underserved Americans.

A House panel on Tuesday attempted to grapple with the basics of the nascent businesses as some members worried new start-ups lacked the ability or interest to prevent discriminatory lending.
"At the end of the day, all of America benefits when our financial system ensures that access to responsible credit is safe," said Rep. William Lacy Clay (D-Mo.), top Democrat on the House Financial Services Subcommittee on Financial Institutions and Consumer Credit.

"Marketplace lending consumers must have clear access to transparent information about the products they're receiving," Clay said. I'll take you there, here: http://bit.ly/29Ntdg1.

Brown: Expect more from Banking panel in 2017: Sen. Sherrod BrownSherrod Campbell BrownA bold fix for US international taxation of corporations Democrats offer competing tax ideas on Biden infrastructure Former Ohio health director won't run for Senate MORE (D-Ohio) has high hopes for the Senate Banking Committee in 2017, after the exit of its top Republican.

The top Democrat on the banking panel said that he expects the committee will get more done in the new Congress, regardless of which party is in control of the chamber.

That's because Sen. Richard Shelby (R-Ala.) will no longer be in charge of the committee, having reached his term limit for the chairmanship.

Shelby took over the committee in 2014, when Republicans regained control of the Senate. But beginning in 2017, Sen. Mike CrapoMichael (Mike) Dean CrapoTrump faces test of power with early endorsements The Hill's Morning Report - Biden shifts on filibuster Senators urge Energy chief to prioritize cybersecurity amid growing threats MORE (R-Idaho) will take the top spot – a source of optimism for Brown.

"Sen. Shelby is term limited out, so I will be the chair with Sen. Crapo as ranking or the other way around," he said Tuesday at an event hosted by the Center for American Progress. "We have a working relationship. He's way more conservative than I am, but he's straightforward and honorable." http://bit.ly/29NXTej.

GOP funding bill would block financial adviser rule: The GOP is turning to the power of the purse to kill the Labor Department's fiduciary rule.

A Republican-backed bill to fund the Labor Department contains a provision that would block the agency from using the money to implement new restrictions on financial advisers.

The Obama administration has clashed with Republicans over the rule.

Earlier this year, President Obama vetoed a high-profile GOP attempt to disapprove of the rule -- and essentially block it -- under the Congressional Review Act.

After that failed, Republicans turned to the appropriations process.

The House Appropriations Committee will vote Wednesday on the Labor Department's funding bill. In addition to the fiduciary rule, the legislation also contains a provision blocking the agency's overtime rule: http://bit.ly/29wxhMw.

Small-business optimism remains flat: The nation's small businesses expressed more confidence in June while signaling that the sector faces bleak prospects amid sluggish economic growth.

The National Federation of Independent Business (NFIB) said Tuesday that its latest index of small-business optimism ticked up 0.7 of a point in June to 94.5 over the January reading.

"Small business optimism did not go down, which is good, but small businesses are in maintenance mode experiencing little growth," said NFIB chief economist Bill Dunkelberg.

"Uncertainty is high, expectations for better business conditions are low and future business investments look weak," Dunkelberg said: http://bit.ly/29Nttfl.

House uprising thwarts change to Patriot Act: The House failed to pass legislation on Monday to enhance a provision of the Patriot Act that encourages banks to tip off federal authorities to suspected cases of terrorist financing.

Many libertarians warned of potential privacy violations if the measure went into effect, which helped prevent it from reaching the necessary two-thirds majority to pass through the fast-track process under which it was considered.

While the bill won a simple majority of 229-177, it didn't clear the supermajority bar needed for passage. The procedure is typically used for noncontroversial bills that pass easily.

Section 314 of the Patriot Act, which Congress enacted in the aftermath of the 9/11 terrorist attacks, encourages financial institutions and the federal government to share information with each other about transactions connected to terrorism: http://bit.ly/29vDNDR.

THE HILL EXTRA: FINANCE: Try us for FREE to get our exclusive take on finance policy and regulation coverage: http://bit.ly/29qHDjz.

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