MAVERICK MOVE: Senate Majority Leader Mitch McConnell’s strategy was to get to the most fundamental aspects of repeal legislation that could garner 51 votes. The so called skinny-repeal, would remove the individual mandate, employer mandate, and defund Planned Parenthood for one year. He and others in leadership advertised it as a “vehicle” to conference committee, where they could hash out a good deal with the House. Up until moments before the vote, the count was uncertain. The bill failed after Senator John McCain (R-AZ) voted no, pleading to his colleagues to return to normal order and find a bipartisan solution. Senators Lisa Murkowski (R-AK) and Susan Collins (R-ME) were the other two Republicans who voted against it over the language to defund Planned Parenthood. This is the most consequential vote (there will be others) the Senate will take between now and midterm elections - and Republicans will need to justify how after seven years and controlling Congress and the White House, they ended up empty-handed.
GOING FISHIN’: After a hectic week in the House, Representatives will be heading home today for a month long recess. They passed the Russia/Iran/North Korea sanctions bill, unveiled an outline for tax reform, and passed the Make America Secure Appropriations Act - the four defense related Appropriations bills that the House wrapped into one “minibus.” It also included the controversial funding for President Trump’s border wall. When they return in September they will only have one month to address eight of the 12 spending bills, the FY18 budget, and the debt ceiling before reaching expiration deadlines - with the health care albatross still hanging around their neck.
THE TAXMEN COMETH: The ‘big six’ unveiled their outline for a tax overhaul after months of meetings with constituents and businesses across the country. The most important goal for them is long term reform; they don’t want tax cuts that expire in ten years, they want an overhaul largely focused on simplification. While no details were given on potential tax rates, the White House’s statement focused on relief for middle-class families (we’ll gloss over recent comments on tax hikes for the rich). Despite gaining the interest of some Democrats, the House plans to use reconciliation to pass it on a party line (yeah, they need to pass a budget first) despite language in the outline that refers to “our friends on the other side of the aisle participating in this effort.” Noticeably missing is House Speaker Paul Ryan’s border adjustment tax (BAT), but they still promise deficit neutral reform.
SANCTIONS TARGET SENIOR VENEZUELANS: The Administration announced sanctions on 13 senior Venezuelan officials close to President Maduro as a signal to him that the U.S. will not back down if the election happens. Maduro is also refusing to back down from Sunday’s election creating a big game of chicken. Additional sanctions from the Administration will likely be on energy imports from Venezuela which could substantially disrupt the oil market and Gulf Coast refining production. Our senior Energy Analyst presented a black book on the effects of Venezuela energy sanctions, watch his full replay here.
STEEL TRAP: Since April, President Trump has been vocal about imposing either tariffs or quotas on steel imports from China, claiming national security reasons. Multiple countries have been voicing their opposition to the potential Trump move; the E.U. has said they will fight back if Trump passes this measure by putting levies on American whiskey, rum, orange juice and more. We believe any trade barrier that would lead to a tit-for-tat trade war would damage the American economy and the world economy. During a Wall Street Journal interview on Tuesday, Trump suggested that a final decision on a steel trade policy may have to wait until other top-priority issues on his agenda get addressed, i.e. health care and tax reform. This has spooked U.S. steel manufacturers pining for relief from President Trump.
STILL WAITING FOR DISH NETWORK COURT RULING: Our Senior Telecom Analyst Paul Glenchur writes DISH hopes a federal court will uphold bid credit eligibility from the AWS-3 auction, cutting potential FCC liability. Read his full piece here.
AT&T/TIME WARNER: THE CLOSING EPISODES (T, TWX): Our Senior Telecom Analyst Paul Glenchur writes AT&T is reportedly discussing merger conditions with the DOJ. We continue to anticipate likely approval with limited, if any, conditions. Read his full piece here.
CMS RELEASES PROPOSED HOME HEALTH PAYMENT UPDATE | NEW PAYMENT SYSTEM INCLUDED: Our Senior Health Policy Analyst Emily Evans wrote that CMS is proposing to adopt a new payment system in a non-budget neutral manner; shift to HHGM will reduce reliance on therapy. Read the full piece here.
