• Bull.




JT TAYLOR: Capital Brief - JT   Potomac banner 2

CALL TODAY: We will be hosting our Quarterly Policy Themes Call - Today, July 19th at 3:00PM ET. Join us for an in-depth conversation with our policy team as they provide insight on major policy issues developing (or collapsing) in Washington. We are halfway through the first year of the Trump era with markets still pushing highs despite a barrage of political bombshells consuming Washington and the media. Republicans are a few weeks away from a long August recess - with health care, the FY18 budget, Appropriations, tax reform and the debt ceiling hanging in the balance. Get the dial-in details here.

HEALTH CARE HOBBLED: Despite Senators Lisa Murkowski (R-AK), Shelley Capito (R-WV), and Susan Collins (R-ME) coming out firmly against repeal without replace, Senate Majority Leader Mitch McConnell plans to vote next Tuesday on a repeal-only bill. He is testing Republican Senators by introducing the exact measure 51 of them voted for in 2015 (Collins was not one of them). However, repeal is not their only option left, they could start over with a (long) traditional process, pass Senators Bill Cassidy (R-LA) and Lindsey Graham’s (R-SC) measure giving power back to the states, or the most overlooked - shape it through regulatory actions by the Trump Administration (not enforcing Obamacare’s mandate). Our Senior Health Policy Analyst Emily Evans is on top of the moving health care agenda - read her latest here.

SIGNALING NEW SANCTIONS: Secretary of State Rex Tillerson certified that Iran is complying with the Iranian nuclear deal as it was laid out; however, the Administration was sharply critical of the deal’s depth. A White House official stated that the deal doesn't go far enough to curb Iran's “malign behavior,” citing human rights abuse, their ballistic missile program, and their support of the Syrian regime. Now, they are talking about increasing economic sanctions. Speaking of… the White House released a statement on the president of Venezuela’s anti-democratic behavior. The country is collapsing from depressed oil prices and socialist rule, causing an economic, political, and public safety crisis. Our Senior Energy Analyst Joe McMonigle wrote about what the Trump Administration might do and the implications here and hosted a flash call with Dr. Francisco Monaldi, a Fellow in the Latin American Initiative & Energy Economics at the Baker Institute at Rice University, listen to the replay here.

TRADE IN AMERICA: President Trump has brought the struggle between two core Republican principles to a head - America first and free trade - pinning a fall in U.S. manufacturing on global trade deals. Kicking off his Administration’s, “Made in America” week, they released their outline for NAFTA modernization, with plans to correct the U.S. trade deficit to Mexico and encourage exports to Canada. A very divisive issue within the party, President Trump is weighing putting a quota or tariff on Chinese steel imports, creating a lobbying storm from economists, many Republicans, and some international leaders who fear this could cause a trade war, upset our allies, and raise the cost of goods. A new Reuters poll says Americans want production here, but don’t want to pay the premium from an increased cost of input material.

JT TAYLOR: Capital Brief - july19

BLACK’S BUDGET BATTLE BEGINS: Today, the House Budget Committee Chair, Diane Black (R-TN), is charging ahead with her markup of the 2018 budget, hoping to get it out of committee and onto the floor for a vote before August recess. While the process has been painstakingly difficult, the fight is only just beginning. With no Democrats on board, she can only afford to lose 22 Republicans, and 30 are rumored to be against it. The House bill includes $1.13 trillion of discretionary spending, with $621 billion of that for defense. It has the language for reconciliation - the vehicle for tax reform - plus, cuts of over $200 billion in mandatory programs. It adds work requirements for Medicaid and closes open ended entitlements for Medicare. Even if it passes in the House, the Senate is only in the formative stage with a committee vote not expected until September (and that’s optimistic) and then they’ll need to go to conference with the House.

REAGAN REVISITED: The path to passing tax reform will be even more difficult than health care, with a lack of agreement on both policy and procedure. Tax reform is being weighed down by the delay in a FY18 budget, and despite Republicans newfound focus given their health care failure, there are still a lot of obstacles to jump. Yesterday, a Senate hearing on tax reform was the first step to turning from health care to taxes, though no Senate proposal has been made and it’s impossible to start without a budget. The hearing showed clear consensus to build on Reagan's 1986 tax reform goals of fairness, efficiency, and simplicity, but with a need to add focus on American competitiveness. The good news is that Speaker Ryan and McConnell, along with their Administration counterparts, are taking a more focused and disciplined approach to tax reform than they ever did with health care.  

EVENT INVITE | DRUG PRICING AND APPROVAL POLICY - IT'S A NEW DAY (JULY 20th @ 11:00 AM ET):  Our Senior Health Policy Analyst Emily Evans will give a rundown of all the major drug pricing and policy trends at the state and federal level including 340B and generics approval. Get the event details here.

REPLAY | 3Q17 HEALTH CARE THEMES PRESENTATION: Our Senior Health Policy Analyst Emily Evans updated and expanded on existing themes and presented new work during our 3Q17 themes call on Monday, July 17th at 1PM ET.  Get the full replay here.

PRE-EARNINGS: LMT’s F35 READY TO BREAK OUT: Our Senior Defense Analyst Emo Gardner writes LMT’S F35 will be a main beneficiary of upward defense spending pressure in Congress and overseas. To find out more, read the entire piece here.