It is of no use to discover our own faults and infirmities unless the discovery prompts up to amendment.
-John Quincy Adams
TRUMPETING HIS TAX PLAN: After days of frustration on the Hill and frenzy at the White House and Treasury, Trump’s tax proposal is set to be released today. Trump met with his tax team as well as the top Republican tax people on the Hill late yesterday ahead of his tax plan release today. While the meeting revealed nothing new on what the plan will be (Treasury staff was still working on language into the wee hours of the morning), Senate Finance Committee Chairman Orrin Hatch came out of an earlier meeting with a change of heart. Previously Hatch indicated that a 15% corporate tax rate would not fly in the Senate, but backtracked and is now offering his support. The proposal will serve as a starting point and will not resemble a final bill that will go through Congress - but our hunch is that the Trump effort is a way to show they are engaged and ready for action and still reeling from the healthcare debacle. As the tax debate moves forward from here, expect an short-lived effort to gauge support from Republicans (and Democrats) for the Trump approach v. those in Speaker Ryan’s camp who want to find a way to offset tax cuts to remain revenue neutral. If we’re wrong and there is a clash with Ryan over command and control of the effort, then all bets are off this year. We'll be hosting a flash call today with David Hoppe - details forthcoming.
IF A TREE FALLS IN THE FOREST: The first trade war has begun and it isn’t between the U.S. and China/Mexico as we all would have expected. The Trump Administration has placed a countervailing duty of between 3 percent and 24 percent on Canadian lumber exporters. This is retaliation of Canada lowering prices for Canadian milk, essentially ending American exports to Canada. The Administration feels that Canada has long subsidized their softwood lumber making it cheaper for them to produce.The U.S. consumes almost 80% of the supply and Commerce Secretary Wilbur Ross feels that by imposing the tariff he is leveling the playing field for the American timber industry. The tariff will push lumber prices higher by about 22 percent and worse for home builders as it will increase the value of a single-family home by $1,236.
MONUMENTAL DECISION: President Trump plans to sign an executive order targeting national monuments in Utah which was a key part of President Obama’s conservation legacy. The Bears Ears National Monument was created under the Antiquities Act, but drew backlash as it shut down development of fossil fuels and other land uses in the area. The order is directed at Bears Ears and Utah’s Grand Staircase Escalante National Monument which was created under President Clinton. The fossil fuel industry has been pushing for these changes, but the Antiquities Act doesn’t allow a president to rescind designations so the Department of the Interior will have to work with Congress to reopen these areas for development.
NET NEUTRALITY HEATS UP:FCC Chairman Ajit Pai has been outlining his plans to cut back strict net neutrality regulations of broadband providers. Ending common carrier utility regulation of broadbands services has been the number one policy priority of cable operators and telecoms and the plan to repeal the common carrier regulation will likely trigger a nasty fight with net neutrality advocates. Republicans have a 2-1 majority on the FCC and the two Republican members have never supported common carrier broadband regulation. If the FCC can take the political heat, it can move ahead to cut net neutrality regulation by ending common carrier classification of broadband access services. You can read an in-depth analysis by our Senior Telecom & Media Analyst Paul Glenchur here. Also mark May 11 on your calendar for a conference call on developments ahead of a critical May 18 FCC meeting.
