Policy Positions on Wall Street: A Quick Look at the Narrowed Democratic Field
With Super Tuesday behind us and the Democratic field now narrowed to just two contenders, our focus as financial communications consultants and practitioners has heightened significantly on each candidate’s relevant policy positions on Wall Street.
Regardless of party affiliations or political leanings, maintaining a solid understanding of the platform and priority areas of each candidate is paramount for financial services firms to effectively communicate with all key stakeholders – whether individual investors and their advisors or global institutions and allocators – in the run up to the November presidential election.
When evaluating the platforms of both Joe Biden and Bernie Sanders, it’s important not only to consider the campaign promises they’ve made on the road over the last few months, but also to examine their legislative track records on Wall Street from their decades on the Hill.
During two terms as vice president and more than three decades as a U.S. Senator from Delaware, Joe Biden’s perspective on financial policy has long tended to focus on improving the economic opportunities of the middle class, with less of an emphasis put on any policies to rein in Wall Street. Conversely, Bernie Sanders, the longest-serving independent in Congress, has used his roles as Congressman and Senator from Vermont to staunchly advocate for more progressive policies that combat economic inequality and push reform on Wall Street, as he did after the 2008 financial crisis.
Below we provide overviews from both the Sanders and Biden campaign platforms on the plans they’ve outlined and statements they’ve made relevant to Wall Street, along with helpful news pieces for further reading:
Joe Biden: With his list of high-profile endorsements continuing to grow, Joe Biden emerged from Super Tuesday as the early leader of the thinning Democratic pack with the highest delegate count and the support of his former Democratic competitors Michael Bloomberg, Amy Klobuchar and Pete Buttigieg. Following in the footsteps of President Barack Obama, Biden’s economic policy agenda largely focuses on a platform to further support opportunities for students and invest in middle class competitiveness, with less rhetoric aimed specifically at Wall Street than his progressive opponents.
While Biden’s Super Tuesday lead appeared to relieve investors and drive a stock market rally led by healthcare stocks, the top issue for Wall Street to watch within the former vice president’s campaign platform revolves around tax reform. Throughout his campaign, Biden has focused his policy proposals on the need for a tax code that rewards the middle class and raises taxes on wealthier individuals and corporations. Thus far, he has zeroed in on priorities such as reversing many of the Trump administration’s tax cuts, raising the corporate tax rate 28 percent and increasing the top tax rate on long-term capital gains.
Key points of his official policy platform related to Wall Street include (but are not limited to) the following:
Reversing President Trump’s tax cuts for corporations and wealthy individuals
Eliminating special tax breaks that reward special interests
Getting rid of the capital gains loophole for multi-millionaires
Bernie Sanders: Following Joe Biden’s emergence on Super Tuesday as a formidable threat to Senator Sanders’ frontrunner status, the Sanders campaign faces the difficult task of winning the support of moderate democrats who seem all but unified in their support for Biden. As with his past campaigns, an impassioned grassroots political movement (or “revolution,” as he’s apt to call it) that champions several populist liberal positions remains the driving force behind Sanders’ presidential push; however, questions persist on whether his support reaches wide enough to secure the party’s nomination.
With regard to Wall Street, one of Sanders’ most frequent talking points on the campaign trail has been his refusal to tolerate the perceived “greed of Wall Street” and the billionaire class that earned him significant populist approval during his first presidential run, and continues to do so. Throughout his current campaign, Sanders has most vocally advocated for a Tax on Extreme Wealth and called for strict policy measures to reduce income inequality. While his core base of supporters has not wavered, experts continue to highlight the incompatibility of Sanders’ policies with Wall Street.
Key points of Bernie Sanders’ official policy platform related to Wall Street include (but are not limited to) the following:
Breaking up too-big-to-fail banks and ending the too-big-to-jail doctrine
Reinstating the Glass-Steagall Act
Capping interest rates and ATM fees and allowing every post office to offer basic and affordable banking services
Auditing the Federal Reserve and making it a more democratic institution so that it becomes responsive to the needs of ordinary Americans, not just Wall Street
Restricting rapid-fire financial speculation with a financial transactions tax
While Joe Biden’s breakout Super Tuesday performance seems to have won him the support (and checkbooks) of the Wall Street establishment, we can expect a variety of other factors and a strong response from the Sanders camp to shape the race to 1,991 delegates by the Democratic Convention in July. We look forward to watching the situation develop following what will surely be a heated battle for Michigan’s 125 delegates on March 10th.