PENNSYLVANIA AVE STAREDOWN: Leadership's idea of a repeal and replace bill on the 7th anniversary of Obamacare wasn’t the best hatched plan as it boxed them into a timeline that wasn’t doable given the amount of work that needed to be done to the bill.
A vote on the AHCA was originally scheduled for 7 PM last night and our latest information pegs the vote sometime between 2-4:00 pm today. The House approved a procedural maneuver last night known as “Martial Law” that grants them same day voting authority to repeal the ACA.
Notwithstanding the delay, Freedom Caucus Chairman Mark Meadows and his colleagues appear to be holding all the cards (and the Republican party hostage) as 30 members are still undecided - but there has been a shift from “no” to “undecided” by some members over the past 12 hours. This comes after OMB Director Mick Mulvaney (and co-founder of the Freedom Caucus) issued a threat from President Trump that they either pass the AHCA or he will leave Obamacare in place.
Even the master negotiator is fed up with negotiating and has found his foil in the Freedom Caucus.
Based on Meadows’ recent statement and given the framework under which he is operating, there needs to be a safety net for the vulnerable populations while lowering premiums at the same time -- a significant move in the right direction and certainly the language moderate Republicans need to hear to stanch the hemorrhaging from that wing of the conference.
In a last ditch effort to appeal to moderates, House leadership added a six-year delay in repealing a 0.9 percent additional Medicare tax on high-income Americans who earn above $200,000. Meadows is the man to watch over the next five or six hours. If he moves in favor of the bill, expect others to follow - if he announces his opposition, then it will be a free-for-all.
The mandatory meeting of the entire Republican conference last night served as a clarion call to all factions of the party to rally around the first major legislative jewel in the Republican crown with Mulvaney making the best case for passage and enactment of the measure as well as tax reform according to sources in the room. We underscore that the implications for Trump’s agenda, Speaker Ryan and the Republican party and the individual health market are so significant that failure isn’t an option.
We think Trump, Ryan and McCarthy will find the votes to get them over the finish line - then the hard work begins in the Senate.
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Editor's Note: This is an excerpt from research written by JT Taylor, chief political stratgeist at Hedgeye. Insititutional investors interested in access email sales@hedgeye.com.
