The wisest use of American strength is to advance freedom.
-George W. Bush
SWEETEN THE PILL: With drug price reform not happening on the Hill, the Trump Administration is working on actions it can take without Congress to fight high drug prices. HHS Secretary Tom Price is taking the lead by holding listening sessions with a range of industry groups and advocates as he works to lay out his policy vision. The main question on the proposal is whether the Administration will stick with Republican solutions or break with the party and opt for more sweeping drug policy reform ideas mainly found on the Democrat side of the aisle. Even OMB Director Mick Mulvaney has reached into the Democrat playbook to by offering a proposal that drug companies would receive rebates in Medicare the same way that do from Medicaid in order to offer discounts.
GOING NUCLEAR ROUND THREE: Conservative Senators Ted Cruz and Rand Paul are pushing to test the limits of how much of Obamacare can be repealed under Senate rules. The nuclear option has now been used multiple times in the last few years, most notably to get SCOTUS Justice Neil Gorsuch confirmed. Cruz and Paul want to overrule the Senate Parliamentarian, and have Veep Mike Pence make the call about whether certain parts of Obamacare can be scrapped. The two Senators believe that Pence will be more aggressive in allowing parts of the repeal process to go through reconciliation. The main policy Paul is pushing for is the ability to allow insurers to sell policies across state lines. As of now Cruz and Paul are out on an island, but with the partisan nature of Congress right now, anything is possible.
YOU HAVE NO CHOICE: Senate Majority Leader Mitch McConnell has thrown a little cold water on fellow Republican Jeb Hensarling's dream of overturning Dodd-Frank. McConnell is not optimistic that Congress could pass a major bill to fundamentally change the financial reform law. The House is expected to pass the the CHOICE Act as early as next week, but it is likely dead on arrival in the Senate without support from eight Democrats necessary to pass the Senate. Democrats agree that they will unite against major changes to the law, but Senate Banking Committee Ranking Member Sherrod Brown has expressed interest in working with Republicans to help relieve some of the pressures on community banking regulations.
LET’S STAY TOGETHER: The Cassidy-Collins working group is growing in size and it’s not just Republicans who are on board. A few Democrats have joined in on the conversations, including Minority Whip Dick Durbin, with Democratic leaders indicating that they would be willing to work with Republicans - as long as they drop their efforts to repeal the law. Collins has a penchant for reaching across the aisle and in good faith with Cassidy, the group is looking to see if there are bipartisanship solutions that could go into reforming the ACA. These talks are very preliminary and as with most of Washington nothing bipartisan lasts for long. And, don’t forget that the consummate strategist - Mitch McConnell - hasn’t shown his hand yet.
STAYING NEUTRAL: Majority Leader Mitch McConnell is holding true to his conservative roots and breaking with the president on tax reform. McConnell will not move forward with any tax bill that is not revenue neutral - not looking to add to the $21 trillion U.S. debt. The tax skeleton released by the White House would add to the deficit at least in the short term, but hope that economic growth will help to bridge the gap in the long run. This doesn’t fly with McConnell although he does agree that reforming the tax code will stimulate the economy.
OPEC SEEKS SENTIMENT SURPLUS WITH 9-MONTH DEAL EXTENSION OF PRODUCTION CUTS: Our Senior Energy Policy Analyst Joe McMonigle writes that Saudi policy now driven by Aramco IPO in 2018 that needs higher price range. But also gives US producers clear guidance to raise production. You can read the full note here.
