I do the very best I know how - the very best I can; and I mean to keep on doing so until the end.
- Abraham Lincoln
SWEETEN THE PILL:The Republican goal of health care reform is to move toward a system that has more choice and competition that will stabilize the marketplace, and the pharmaceutical industry is moving to preemptively find common ground with Trump Administration on the issue. Given the president’s goal to streamline and improve the FDA process, drug companies acknowledge that the pricing model needs to evolve, but feel that it is a tough proposition as the approval process takes several years - and are hoping to move towards an outcome based system and believe that can help speed up the approval process.
FRACK IS BACK:The Trump Administration is planning to repeal Obama’s landmark rule setting standards for hydraulic fracturing on federal land. The Obama Justice Department had been fighting the oil and natural gas industry and conservative states to get the rule reinstated. The Department of the Interior would likely propose an repeal of the rule within the next 90 days and it will likely become official early next year. This rule was a top target of key industry allies to President Trump.
OFF THE RAILS: Although Trump is calling for $1 trillion in infrastructure spending over the next ten years, his budget proposal looks to cut funding for the Department of Transportation by 13 percent. The main cuts are to the Federal Transit Administration's Capital Investment program, as well as the elimination of funding for the Essential Air Service program and federal support for long-distance Amtrak trains. The cuts have raised bipartisan anger as both sides view this as a step in the wrong direction to Trump’s proposed infrastructure spending.
PRIMPING FOR PARIS:Trump officials are working with energy companies to determine the future of America’s involvement in the Paris climate agreement. Many companies are pushing the Administration to remain in the pact, but to dial back President Obama’s greenhouse gas emissions with the original pledge committing the U.S. to reduce emissions by 26 to 28 percent by 2025. While no action has been taken just yet, the climate agreement is pitting Secretary of State Rex Tillerson and Ivanka and Jared Kushner against the more conservative wing of the Administration.
FED FORECASTS FLAT-OUT WRONG: The Federal Reserve’s U.S. economic outlook is, once again, out of touch with reality, writes Hedgeye CEO Keith McCullough. Following their decision to raise rates Wednesday, Fed chair Janet Yellen said: "The simple message is – the economy is doing well." We agree. Our GDP estimates suggest year-over-year growth will accelerate from +2.3% in the first quarter to +3.1% in the fourth quarter. At odds with Yellen’s cheerful testimony, however, was the Fed’s own forecast. The central bank cut the top-end of its year-end 2017 GDP estimate; the range is now +1.7-2.3% year-over-year growth. Meanwhile, the Atlanta Fed’s GDPNow tracker – it has an abysmal intra-quarter tracking error of 230 basis points – puts first quarter GDP at an inexplicably low 0.9%. In other words, Yellen & Co. need to square their rosy PR with their dismal estimates. Which is it?
TODAY: CALL INVITE / A BAT IN THE HOUSE: David French of the National Retail Federation will discuss the Border Adjustment Tax and Tax Policy on Retailers Under the Republican Congress + Trump Administration – March 17th at 11:00 AM. You can find a link to the call here.
PENTAGON'S $30B SUPPLEMENTAL REQUEST HAS TOUGH SLEDDING AHEAD: Our Senior Defense and Telecom Policy Analyst Emo Gardner writes that the probability of a year-long CR and yet another fiscal cliff scenario in the fall have increased with Thursday's budget plan releases. You can read the full analysis here.
