Capital Brief: The Trump Administration ... Who's Next On The Chopping Block?

Capital Brief: The Trump Administration ... Who's Next On The Chopping Block? - chopping block

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.

LOST IN THE SHUFFLE

After a chaotic start to his presidency manifested by the botched firing of FBI Director James Comey, President Donald Trump is considering a massive reboot that would shake up his Administration. At the urging of some of his outside advisors, chief of staff Reince Priebus, Stephen Bannon, Don McGahn, Sean Spicer and others could be headed to the chopping block.

Jared Kushner is said to be positioning NEC Director Gary Cohn to be Chief - but that invites a wave of scrutiny and criticism by Trump’s only allies inside the Beltway as Cohn’s pedigree as a Democrat has been well-established. The shake up could be just what this Administration needs as there have been countless unnecessary stumbles out of the gate, and a new staff could get the White House back on message. But is it the message or the messenger-in-chief?

TWO HEADS ARE BETTER THAN ONE

Majority Leader Mitch McConnell’s health care working group just picked up a friendly rivalry - led by two other fellow Republicans. Senators Susan Collins and Bill Cassidy have created their own group to try and influence the direction of the Senate’s Obamacare replacement bill.

Cassidy and Collins have already put out an ACA repeal proposal, yet both were left off of McConnell’s working group and it gives them some leverage in what will end up as the final policy proposal given McConnell’s slim vote margin. Collins has already indicated she won’t support a bill that defunds Planned Parenthood, and Cassidy, a physician, has made a name for himself for his own ‘Jimmy Kimmel’ test aimed at protecting those with pre-existing conditions.

MEDICAID MATTERS

House Budget Committee Chairwoman Diane Black is ready to take Medicaid to the meat grinder. Black wants to push for a change to the Medicaid reimbursement rate to ensure that Medicaid dollars are going to support children and the disabled below the poverty line and not able-bodied adults. Speaker Paul Ryan has pushed for Medicaid reform since he first ran for office two decades ago, but doesn’t want to stop there.

The Speaker not only backs the resolution for Medicaid, but also wants to include reforms to Medicare as well which puts him at odds with President Trump who campaigned on the promise that he wouldn’t cut the program.

BLIND AS A BAT

The border adjustment tax continues to cause headaches (or migraines) for Speaker Ryan. Many members of the Republican caucus in the House have already indicated that they wouldn’t support a tax reform bill that includes the tax; making it unlikely that Ryan’s plan would get the 216 necessary votes to pass.

The opposition spans members ranging from the conservative Freedom Caucus to the more moderate Tuesday Group which will blunt any momentum for tax reform that Ryan hoped to achieve. If Ryan’s plan isn’t the one that is going to move forward on the Hill, than President Trump will have to dirty his hands and lead the charge himself.

PROTECTING THE COASTS: A bipartisan group of Members of Congress sent a letter to the Trump administration urging them not to open up the Atlantic or Pacific oceans for oil and gas drilling. Trump signed an executive order requiring the Interior Department to reconsider the five-year offshore drilling plan that the Obama Administration finalized last year. While the group of Congressmen is made up mostly of Democrats, three of its co-authors were Republicans Frank LoBiondo, Dave Reichert, and Mark Sanford - and they are appealing the Administration because they believe the drilling would imperil local economies based on fishing and tourism.

GENERAL DAN CHRISTMAN/ ELECTION SEASON: IRAN IN THE QUEUE: General Dan CHristman shares his thoughts on the upcoming Iran election. You can read the full piece here.

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