A pessimist is one who makes difficulties of his opportunities and an optimist is one who makes opportunities of his difficulties.
-Harry S Truman
WHAT’S THE SCORE: The CBO released its score for the updated version of the AHCA taking into account the MacArthur/Meadows, Upton, and Palmer/Sweikert amendments. It comes across as a win for the Republicans because even though deficit reduction is a little worse than the previous score, the House won’t have to vote on it another time. The amended version of the AHCA will reduce the deficit by $119 B over the next ten years (the previous version reduced the deficit by $337B) while potentially leaving 23 million people uninsured (although the CBO is still using the March 2017 baseline that includes rather optimistic projections on insurance coverage especially in the non-group market). The House can finally send the bill over to the Senate where work can ‘officially’ begin on the measure. Our health care policy analyst Emily Evans has a more in-depth breakdown here.
TAKING A SWIPE AT DURBIN: House leadership is going to drop Durbin Amendment language from the CHOICE Act after whipping the bill before a planned vote on the House floor this week. The whip count showed wavering support within the Republican ranks delaying the planned vote - now scheduled the week after Memorial Day recess. The amendment sets caps on debit card swipe fees was unpopular among Democrats and enough Republicans that it jeopardized the future of the Dodd-Frank reform bill in the House. Representatives David Young (IA) and Dennis Ross (FL) are leading the push to keep the Durbin Amendment intact as they believe credit card companies will exert too much power over the price of routing fees. This puts them at odds with price control-averse Republicans who are in favor of repealing the amendment. While this is a defeat for Financial Services Chairman Jeb Hensarling, the bulk of his reform agenda will advance in the House in early June.
DROPPING THE BAT?: Speaker of the House Paul Ryan is starting to feel the tax heat building up. As part of Ryan’s vision for tax reform, the border-adjustment tax (BAT) would go a long way in making the plan revenue neutral. The pushback from the White House and other conservatives in the House has not gone unnoticed - and was even left out of Trump’s budget tax proposal. Now Ryan is starting to back off a little bit from the BAT indicating that he can envision a scenario where the House passes tax reform without the tax - and could decide to leave out the BAT to maintain party unity as the process moves forward.
LOOKING FOR LEVERAGE:Trump’s vision for infrastructure was laid out in his budget request setting the stage for a more detailed strategic plan to be spearheaded by Transportation Secretary Elaine Chao. The proposal will inject $200 billion (hoping to lever it to $1 trillion) into transportation projects over 10 years which was widely expected. It will rely on four key approaches: leveraging private sector investment, ensuring federal dollars are targeted toward transformative projects, shifting more services and underused capital assets to the private sector and giving states and localities more flexibility. The major key to getting the private sector involved is to eliminate excessive regulations and speeding up project delivery. The White House also plans to expand the Transportation Infrastructure Finance and Innovation Act Program, reduce tolling restrictions on existing interstate highways, allowing private investors to construct and maintain rest stops, and encourage programs to explore innovative ways to reduce traffic.
DELAY TO PAY: Insurance companies will remain in limbo for another 90 days as the Trump Administration decides what to do on Obamacare subsidies. The Administration has asked for another 90 days to work out a lawsuit over subsidies that help poorer people afford to use their Obamacare insurance plans. Trump will continue to pay the subsidies for the next 90 days while deciding what their future holds. Without the payments, insurers threatened to drop out of Obamacare or substantially raise premiums. While this is a win for those who support Obamacare, it does not relieve the underlying uncertainty surrounding the payments. This comes at a critical time as health insurers are deciding whether they will participate in the ACA next year, and what they will charge their customers. While all eyes are on the Senate health care debate, some of the major decisions are being made in the hinterlands.
We won’t be publishing tomorrow and early next week - have a great Memorial Day weekend.
OPEC MONITORING COMMITTEE RECOMMENDS 9-MONTH EXTENSION: Our Senior Energy Policy Analyst Joe McMonigle writes that OPEC Ministers must still ratify 9-month extension at Thursday meeting but recommendation is clear signal of outcome. You can read the full piece here
FIRST LOOK AT PENTAGON BUDGET IMPACTS ON LMT, BA, GD, RTN, AND NOC: Our
Senior Defense Policy Analyst Emo Gardner writes prime contractors' major defense programs show few unplanned changes in FY18 Pentagon budget proposal. You can read the full analysis here.
