RYAN REFOCUSES: “Once in a generation” is how House Speaker Paul Ryan is framing the opportunity the government has to fix the tax code and give it a complete overhaul. Calling the current code too confusing and a mess to a friendly audience at the National Association of Manufacturers, Ryan is pitching his simplified version that includes moving from seven tax brackets to three and cutting current taxes imposed on corporations and small businesses. But nary a mention of the border adjustment tax he and Ways and Means Chair Kevin Brady favor. With healthcare taking up all the oxygen in Washington, Republicans will continue to press lowering taxes as necessary to growing U.S. competitiveness globally and Ryan promises these cuts will create good paying jobs for over one million people - the harder promise to keep is the 2017 deadline.
THE DONORS WENT DOWN TO GEORGIA: Handel’s win in the GA 6th district special election is a sign of stability in the House for Republicans and gives them a little breathing room for the next 16 months - and with South Carolina also going their way, they managed to control all the seats up for grabs from special elections. We see this as a bigger and demoralizing loss for Democrats than a win for Republicans since the party just lost the most expensive Congressional race in U.S. history, one where Ossoff (D) received north of $23 million from national Democratic supporters. However, Republicans should pay attention to the warning signs on the horizon - there are enough Republican seats in districts Hillary Clinton won in 2016 for Democrats to take back the House, that is, if they can manage to regroup and re-motivate.
FLOOD THE FLOOR: Out of the House Financial Services Committee, a bipartisan effort to renew and reform the National Flood Insurance Program (NFIP) is on its way to the House floor. NFIP funding is set to expire at the end of September and while most Republicans typically vote against increased regulation and federal subsidies, NFIP garners support on both sides of the aisle, especially from coastal States. A key part for passage is lowering insurance premium hikes alongside increasing the subsidized funding for low income houses. This looks similar to the bill proposed in Senate which would reauthorize NFIP- a great thing for real estate development in “risky” flood zones like parts of Florida and Louisiana, according to Senators John Kennedy (R-LA) and Marco Rubio (R-FL).
CURBING CARBON: A group of outside Republicans unveiled an industry-backed free market approach to curbing climate change. The Climate Leadership Council (CLC), didn’t reinvent the turbine, instead they have fully fleshed out a policy plan for a carbon tax. Coming only a day after Secretary of Energy Rick Perry said he didn’t believe carbon was the primary cause of climate change, BP, Exxon, and Shell endorsed the CLC’s plan to tax greenhouse gas emissions and create a climate dividend for taxpayers. The plan is unlikely to reach the Hill anytime soon, but has support from every side of the climate debate; lowering regulations, increasing federal revenue, and beating Obama era climate standards twice as fast.
MIDDLE EAST PEACE: White House Senior Advisor Jared Kushner lands in the Middle East to meet with Palestinian President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu. Kushner and White House Aide Jason Greenblatt are tasked with re-launching the peace process between the two countries, Trump has made it very clear that working towards a peace agreement between the Israelis and Palestinians is a top priority. Seeing Trump put this into action will really show his ability to work diplomatically, something we’ve yet to see as part of his emerging foreign relations doctrine.
GEN. DAN CHRISTMAN DISCUSSES TRUMP’S EMERGING FOREIGN POLICY DOCTRINE: Hedgeye hosted a call with our Senior Advisor General Dan Christman to discuss the dimensions and dynamics of President Trump's emerging foreign policy doctrine five months into office. Don’t worry if you missed it, we have the replay here.
ARE ULTRA-LONG TREASURIES THE NEXT BIG THING?: Hedgeye Demographer Neil Howe writes that policymakers are exploring the possibility of introducing “ultra-long” Treasury bonds. The potential benefits are vast. Read more on what those benefits are here.
