THREE WEEKS NOTICE: With scant victories over the past six months, Republican Senators are grinding and delaying August recess until they can accomplish an eight-year old promise (not to mention ~62 repeal votes) to repeal and replace Obamacare. With ten nay votes at hand, Senate Majority Leader McConnell's plan looks so bleak they’re talking backups: Trump wants to repeal now/replace later, McConnell says they'll just fix Obamacare markets, Senator Lindsey Graham (R-SC) is working on his own proposition and the House is trying to block individual mandates through the IRS. The truth is the only passable option that fixes healthcare is an agreement on repeal and replace. Washington insider confidence in McConnell’s ability to get a deal over the fence is diminishing with each passing day; rumors are he is adding the Cruz amendment to pull the bill further to the right so it can pass in the House. We’d call that the anchor that sinks the ship, but knowing McConnell, we bet he’s adding a lot of moderate buoys to keep it afloat. Our Senior Health Policy Analyst Emily Evans wrote about the pros and cons of a passing vote, get her insight here.
BIGGER THAN REAGAN: With Republicans controlling Washington, it is time for the tax code to be simplified and the Trump Administration and the House are trying to jump start the process. Once (should) Congress gets through health care, the opening will come for tax reform which is more fertile ground for the Republican faithful. President Trump is thrilled with his “bigger than Reagan” tax cuts that and will consolidate taxpayers into three brackets with Treasury Secretary Steve Mnuchin insisting the most cuts will come to middle class families. The House is holding their first hearing this week on how tax reform can benefit small businesses and with Republicans wary of adding debt from reduced revenues, they are including in the overhaul measures to close out many itemized deductions which greatly benefit the upper middle class and the wealthy.
A CLASS ACT: The Consumer Financial Protection Bureau (CFPB) issued a rule (subject to Congressional approval) that targets banks and credit card companies by preventing them from using arbitration clauses to stop class action lawsuits. This Obama era rule is highly controversial; while the CFPB believes they are protecting consumers, Senator Mike Crapo (R-ID) believes this will only hurt them and is promising to start an effort to overturn it through the Congressional Review Act. House Financial Services Chair Congressman Hensarling (R-TX), author of the CHOICE Act and CFPB critic said, "As a matter of principle, policy, and process, this anti-consumer rule should be thoroughly rejected by Congress..." He will likely address the issue when he gets the opportunity to question Fed Chair Janet Yellen today. We see her sticking to talking points about defending her choice to raise interest rates and speaking to the health of the economy.
STAY INSIDE THE LINES: In a battle likely to be waged all the way up to the Supreme Court, Federal judges are taking up a lawsuit filed against Texas’ Congressional district lines which are believed to unfavorably group minorities. While Democrats are unlikely to gain a majority of House seats in Texas anytime soon, the real bonus of the fight is to win political leverage in redistricting. The courts could rule to require the Justice Department to approve all lines. If this sounds familiar it's because three other states this year filed similar suits and the Supreme Court has already agreed to hear Wisconsin’s.
IN WRAY’S WAY: Nominated FBI director Christopher Wray is awaiting confirmation as President Trump’s choice to replace James Comey. We were already expecting questions about Russia, the election and potential obstruction of justice, but as the layers keep building, be prepared for this hearing to become more about Russia than Wray himself. Wray is a straight shooter who will talk about the importance of independence in the FBI - not Putin and Trump’s first meeting and not Donald Trump Jr. So what is really going on and should markets worry? Don’t rush to judgment and instead of focusing on the back and forth, focus on what’s actually moving - like the Russian sanctions bill recently dissected by our Senior Energy Analyst Joe McMonigle, get the full piece here.
CALL INVITE | THE ART OF THE DEAL - TRUMP V. NAFTA: Mark your calendar for a conference call with John Murphy of the U.S. Chamber of Commerce tomorrow, July 13th at 11:00am ET on the timeline for NAFTA renegotiations, the emerging contours of the Administration’s strategy, and the implications on trade and the the U.S. economy. Get the event details here.
CALL INVITE | 3Q17 HEALTH CARE THEMES PRESENTATION: Our Senior Health Policy Analyst Emily Evans will be updating and expanding on existing themes and presenting new work during our 3Q17 themes call on Monday, July 17th at 1PM ET. Get the dial-in details here.
BACK TO THE FUTURE WITH CHINA: END OF THE "NORTH KOREAN ECLIPSE": Our Senior Adviser Dan Christman wrote about the docket of contentious U.S./China issues, from national security disagreements over the South China Sea to commercial disputes heightened by an aggressive China industrial policy to North Korea. Read the whole piece here.
OPEC LOOKS TO FIX LEAKY CEILING WITH LIBYA/NIGERIA PRODUCTION CURBS: Our Senior Energy Analyst Joseph McMonigle writes exemptions for Libya and Nigeria have undermined OPEC deal by adding 800K B/D in new production. OPEC committee will meet July 24 in Russia. Get the full piece here.
CALL REPLAY | LOADED FOR BEAR - RUSSIAN SANCTIONS AHEAD?: Hedgeye hosted a call on Russian sanctions with the Deputy Director of the Kennan Institute for Advanced Russian Studies of the Woodrow Wilson Center, William Pomeranz. Dr. Pomeranz discussed the sanctions timeline to passage, implications on businesses in the U.S. and globally, and what they mean for National Security, as well as President Trump's meeting with Russian President Vladimir Putin at G20 tomorrow. If you missed the call, listen to the full replay here.
