• Bull.




JT TAYLOR: CAPITAL BRIEF - JT   Potomac banner 2

WAITING ON WEDNESDAY: Senate Majority Leader Mitch McConnell is expected to call a vote next Wednesday on the Cassidy-Graham-Heller-Johnson effort to repeal and replace Obamacare, even without a confirmed 50 yays. That is a tight timeline to convince wavering Senators Lisa Murkowski (R-AK) or Susan Collins (R-ME) to support the measure. Congress is out the rest of this week and next week was already jammed pack with tax reform. McConnell has tried coercing Republican Senators before by bringing a repeal effort to the floor and daring them not to vote for it - it didn’t work. Not much has changed since that last effort. The Cassidy-Graham Amendment was available then, but wasn’t even picked up and this push-through process is far from the order Senator John McCain (R-AZ) called to have.

SPEAKING OF TIMELINES: Wednesday, September 27th was supposed to be the day the Big Six released their framework for tax reform. Republican leaders need to stick to this timeline and avoid all delays in tax reform, for it to be completed by the end of 2017 - which is looking increasingly difficult as new distractions pop up (hint = health care). The agreement reached between Senators Pat Toomey (R-PA) and Bob Corker (R-TN) is a crucial step in ensuring a budget gets passed by mid-October, but there is still a lot more to do. For now, the Big Six’s communications team was invited to the White House to discuss their roll out, showing they plan on moving as scheduled. Going to be a big Wednesday.

WALL HITS WALL: California’s AG and former House member, Xavier Becerra, along with others filed suit against President Trump, yesterday. The suit encompasses a slew of allegations related to Trump’s insistence on building the border wall. By saying the wall violates federal environmental standards and the separation of federal and state powers - they will, at the least, delay the building process. Trump himself has been caught saying the wall is politically motivated, and even stirs up controversy in his own party - fiscal hawks do not want to pay for it and some Representatives (on both sides of the aisle) on the border, say it will be ineffective. While tying funding for the wall to DACA legislation was discussed, it has been dropped as massive U.S. companies (Walmart, Target, Tech) have been lobbying for DREAMers.  

BREAKING THE DEBT CEILING: Senator Chris Coons (D-DE) and two other Democratic Senators introduced legislation to put an end to the debt ceiling. Their reasoning reflects President Trump’s - the limit does nothing to control government spending and is only used as a political football to threaten default. But Republican fiscal hawks strongly disagree, many of these Senators and Representatives ran for office specifically to reel in spending and control the country's debt. If the legislation was developed out of a partnership with Trump, instead of from Coons running with offhand comments the president’s made, we would pay more attention to it, but this isn’t going anywhere, at least not for a while.

YELLEN TIME: The Federal Reserve announced their anticlimactic decision to hold interest rates for now, but begin reducing their portfolio size - a sign of confidence in the economy. The Fed is not without political motivation, however. President Trump was highly critical of Chair Janet Yellen before taking office, calling her a puppet for Obama. Now, he says that she’s doing a good job - leaving questions on whether he will renominate her - it is customary for presidents to keep Chairs for, at least, a second term. Even if he does renominate her, Yellen has been unclear if she would take the position again.

EVENT TODAY | QUARTERLY POLICY THEMES: Thursday, September 21 @ 2pm: We will be hosting our Quarterly Policy Themes Call Thursday, September 21st at 2pm. Led by our Macro Policy Analyst JT Taylor and Health Care Analyst Emily Evans, this presentation will be a conversation with our policy team as they provide insight on major policy issues developing in Washington. It is crunch time for Congress who has a jammed packed legislative agenda ahead. Over the next three months, they must address an FY18 budget, appropriations, tax reform and maybe even health care reform. Get the event details here.

PROLONGED NET NEUTRALITY FIGHT (CMCSA, CHTR, ATUS, T, VZ, S, TMUS): Our Senior Telecom Analyst Paul Glenchur writes that the FCC should repeal current net neutrality rules by year-end, but the subsequent court battle likely delays work on legislation. Read the full piece here.

IRAN NUCLEAR DEAL END IN SIGHT: Our Senior Energy Analyst Joe McMonigle writes President Trump's UN speech is the latest signal of U.S. / Iran deal exit. The mid-October decision is a catalyst for taking 1M b/d of Iran's crude off the market. Read the full piece here.

EVENT: DEPUTY ENERGY SECRETARY & FORMER OPEC PRESIDENT HEADLINE OCT 11 HEDGEYE ENERGY CONF (NYC) Our Senior Energy Analyst Joe McMonigle is hosting a Hedgeye energy conference in New York City. Topics include regulating pipelines, grid reliability and energy infrastructure in the Trump Administration - as well as an OPEC meeting preview. Get the event details here.