Trump's Troubling Numbers, Sanders' Other Math Problem; Will Carried Interest be the New Inversions?
TRUMP'S TROUBLING NUMBERS: Donald Trump is under fire for waffling on the pillars of his economic plans. We think he has a bigger numbers problem - and his difficult task of winning over key demographics (particularly Hispanics) may have just gotten harder. Yes, his unfavorables are at a historic high for a major party nominee; and yes, his misguided attempts to win over those groups (think: TacoGate 2016) have not done him any favors. But that may be nothing compared to the impending "Hispanic backlash." Trump is backed up against a big border wall for a number of reasons: he has a net favorability among Latinos of negative 78% (while Hillary Clinton is at +29%). Since 1980, no Republican has won the White House without locking down at least 30% of the Hispanic vote, and Hispanic registration is up in a number of key states - CA, CO, NV and FL - to name a few.
BERNIE SANDERS' WAR ON MATH: The Democratic underdog is fighting over big numbers again, and this time they're coming at him from the left. The left-leaning Urban Institute did the math on Sanders' "Medicare for all" program estimating it would increase federal spending by $32 trillion over 10 years - yes, that's trillion with a T. Sanders had previously estimated the cost to be closer to a measly $13.8 trillion. But West Virginians don't seem too concerned. Despite Sanders' long list of policy proposals with no clear way to pay for them, he is likely to pick off another win in WVA today and the Democratic contest will just keep dragging on.
CARRIED INTEREST, THE NEW INVERSIONS? Tax Notes recently suggested the Obama Administration could use the regulatory process to close the so-called "carried interest loophole." Treasury officials responded in an eerily similar tone it used during the run-up to recently-released inversion guidance, saying closing the loophole was a top priority and that Treasury is "continuing to explore its existing authority...but the department cannot eliminate the carried interest tax benefit by itself." Given the heat they are taking on their unilateral action on inversions, we would be surprised to see Treasury take on another battle. But given Clinton, Sanders and Trump have all criticized the carried interest provision, the rhetoric on this issue will likely heat up just in time for the summer.
ANYTHING BUT REGULAR ORDER: When he became Senate Majority Leader in 2015, Mitch McConnell promised a return to "regular order" when considering legislation. He specifically wanted to avoid more short-term government funding patches by passing all 12 appropriations bills that fund government programs and agencies - something that has not happened since 1994. Fast forward to present - the Senate has failed to pass a budget for 2017 and is now stuck on the first funding bill out of the gate, the Energy and Water Appropriations bill, over an issue related to Iran. Despite McConnell's worthwhile goal, we fear short-term funding patches and looming shutdowns are destined to be the new normal. Driving off these cliffs are predictably avoided, but in ever-decreasing dramatic fashion. A new Administration could change this - but not as long as Congress remains as polarized as it is.
