Here's a quick look at some key issues investors should keep an eye on from Hedgeye's JT Taylor and our team of Washington Policy analysts in D.C.

Capital Brief: 5 Things to Watch Right Now In Washington - capital brief

Great lives never go out; they go on.

-Benjamin Harrison

A TAXING WEEK

We hosted a flash call yesterday with David Hoppe, the former chief of staff to Speaker of the House Paul Ryan, where he took us through the president’s tax plan as revealed by NEC Chief Gary Cohn and Treasury Secretary Steve Mnuchin. Hoppe talked about how the plan will not be able to move through FY 18 reconciliation without healthcare first getting passed as it makes balancing the budget for tax reform easier.

The real difference between Trump’s principles and Speaker Paul Ryan’s Better Way plan is the impact on the deficit - and the price tag on the Trump plan won’t fly in the House.  Look for a tug-of-war in the coming weeks over Ryan and Ways and Means Chairman Kevin Brady’s border adjustment tax as the means to “pay-for” tax reform.

The Trump plan excluded the tax on imports, but we’re hearing Ryan will not back down even in the face of White House omission - and opposition. It’s the fierce lobbying effort ahead that they’ll have to worry about.  You can listen to a replay our of call with Hoppe HERE.

WAITING ON TUESDAY

As if tax reform and funding the government wasn’t enough for one week, the House Freedom Caucus announced that it will now back the American Health Care Act with the amendment allowing states to opt out of key ObamaCare rule. Freedom Caucus Chair Mark Meadows and moderate Tuesday Group member Tom MacArthur brokered the agreement that lets states apply for waivers from ObamaCare provisions that ban insurers from charging sick people higher premiums and mandate minimum insurance coverage requirements.

This was enough to get the roughly 30 members of the hardline conservatives on board. Now all the president and House Leadership need to do is convince the remaining members of the Tuesday Group to support the bill to ensure they can get over the 216 threshold.  Not to mention 50 members of the Senate...

KEEPING THE BAND TOGETHER

President Trump in his most definitive statement yet on trade, let Mexican President Pena Nieto and Canadian Prime Minister Justin Trudeau know that he will renegotiate NAFTA instead of tearing it up. Many people in Trump’s camp were pushing for him to pull out of the deal in the first 100 days, but the reality of tearing up the deal, which would need congressional support, would have caused serious issues on Capitol Hill and diplomatic circles.

Trump has already shown though that he is not afraid to spar in the trade market following the tariffs he slapped on Canada’s soft lumber exports, but now he is going to try the hard challenge of negotiating with his hands tied.

MAKE A CHOICE

Financial Regulation reform will begin in earnest next week as the House Financial Services Committee will begin hearings on TX Rep. Jeb Hensarling's Financial CHOICE Act. While Hensarling’s bill has support in the House it is viewed as dead on arrival when it makes it to the Upper Chamber.

While the bill will not make it through the Senate, Banking Committee Chair Mike Crapo and Ranking Member Sherrod Brown are focusing on smaller bipartisan bill that focus on regulatory relief and support for community banks and credit unions.

CLEANING UP ON COAL

Senate Majority Leader Mitch McConnell has broken with his past and called for a long-term fix for miners health care benefits in the next government funding bill. This is a good piece of bipartisan legislation that both Democrats and Republicans can get behind.

The benefits for coal miners has complicated Congressional spending debates historically, but Senators representing coal country are indicating that the fix will be included in the government funding bill. The deal that is emerging would let the miner’s health fund take the money from the federal Abandoned Mine Lands fund, which mining companies pay into to support government cleanup at old mining sites.

FLASH UPDATE: OMNIBUS BILL WILL FULLY FUND DEFENSE PLUS $15B SUPPLEMENTAL

Our Senior Defense Policy Analyst Emo Gardner writes that Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request. You can find the piece here.

AMENDMENT TO AHCA LEAKED - NO MENTION OF MEDICAID; ALLOWS STATES TO WAIVE EHB, RAISE AGE RATIO

Our Senior Health Policy Analyst Emily Evans writes the amendment shifts more authority to states under a waiver system. Keeps Medicaid language in deference to Senate's interest. You can find the full piece here.

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