JT TAYLOR: Capital Brief

08/25/16 07:15AM EDT

JT TAYLOR: Capital Brief - JT   Potomac banner 2

 

"In the time of darkest defeat, victory may be nearest."

-  William McKinley

FOUNDATION DAMAGE: The never-ending saga continues with a new batch of emails showing Hillary Clinton and her lieutenants consistently coordinated with State Department officials and Clinton Foundation aides to reward major donors with access to the powers-that-be at State. The situation poses an extraordinary risk for ethics challenges if elected president, though Clinton continues to brush off the release as politically motivated. We don’t expect the mess to go away without answers, and the longer she lets it go, the more damage is done. Democrats may think they have November in the bag, but they shouldn’t underestimate the fickleness of the American voter. Donald Trump and Republicans, who grab much of the media’s attention, are happy to let this be the gift that keeps on giving.  

 

IMMIGRATION TRANSFORMATION: Trump’s bid for presidency was built on a promise to build a "great, great wall" along the Mexican border, have them pay for it, and deport 11 million undocumented immigrants from U.S. soil - all while portraying Mexican immigrants, as criminals and rapists. Trump is now scheduled to hold his second meeting with his new Hispanic advisory board, leaving little doubt that he will shift his longstanding views, and his hard-nosed supporters are embracing it so far, calling it a more feasible approach to deportation without undermining his mainstay position. His softening tone may be an appeal to minorities and moderates, but the message hasn’t resonated just yet. It’s still hard to see them throwing their weight behind Trump after the past 14 months of heated rhetoric.

 

SHORING UP THE BASE?: Trump may be massaging his message, but he hasn’t adjusted his campaign strategy just yet - he’s spending valuable time in states that will not provide him the votes he needs on Election Day. After canceling campaign stops in CO, NV, and OR, Trump stumped in TX and MS – two reliably red states that support him and the past nine Republican nominees. There’s money to be made in these states, but at a time when he needs to extend his reach to everyone, he’s focusing on shoring up the base. Trump craves high energy rallies and feeds off the enthusiasm, but the aforementioned stops will not put him over the top in the Electoral College and propel him into the White House. Once Labor Day hits, expect to see his camp refocus on battleground states like OH, PA, NC, and FL…but it may prove to be too late.

 

CLINTON COUNTS DOWN: Clinton’s controversy is deep-seated and misguided, don’t get us wrong, but she’s making all the right moves with 74 days left until Election Day.  We don’t see Clinton sitting down to declare regrets about her private server or quid-pro-quo relationships between her foundation donors and the State Department any time soon, as the Clinton camp thinks they can finish out the game without any severe reaction to the new emails - but that doesn’t mean there won’t be a response of some sort. Inside her camp, the team is unwilling to go on offense without evidence that the new emails and foundation allegations are hurting her, and rightfully so, because without new information and dramatic improvements in Trump’s numbers, Clinton’s camp thinks it's better off avoiding it all together. There’s also a possibility that Republicans may overplay their hand while hammering Clinton on an issue that most voters are sick of hearing about.

KEEPING UP WITH THE SAUDS: The OPEC rumor mill is in hyper-drive with reports that Iran is "sending positive signals" on a production freeze, and may actually attend the informal OPEC meeting as its held on the sidelines of the International Energy Forum and attended by potential crude customers. This freeze sequel is expected to end the same as April's - no agreement and no freeze. It looks to be public relations so Iran doesn't look like the bad guy after the Saudi's made comments on cooperating with other OPEC members "if necessary." In our view, it’s still too soon for any change in OPEC production policy. Saudi Arabia is more nervous about oil at $50 than $40 because they know it keeps U.S. shale alive, and they only care about declining U.S. production and need to see more of it. Iran is just eight months into ramping up exports and regaining market share, so they simply can't agree to any limits on production now, while arguments that Iranian production is plateauing will fall on deaf ears in Tehran. Add in another rumor that Iran plotted to assassinate the Saudi Ambassador to Iraq, and we don't have the makings of a productive meeting in September.

 

BROADBAND PROVIDERS SEEK NET NEUTRALITY REHEARING: Our Telecommunications-Media Policy Analyst Paul Glenchur still expects an appellate court to deny rehearing of its anti-cable/telco net neutrality ruling, putting the focus on the Supreme Court. You can read his views on the topic here.

 

INVITE | STAYING AHEAD OF THE CURVE IN DIAGNOSTICS POLICY: Please join our Healthcare Policy Analyst Emily Evans for a webinar on lab reimbursement and policy changes on September 1st, 2016 at 10:30 AM ET. You can find more information here.

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