CHECK IN:
- 7 days - until NFIP and CR to fund the government expire
- 11 days - until the Alabama Senate election
- 14 days - until Christmas Congressional recess
- 14 days - until the end of year expirations (tax extenders, Medicare extenders, FISA)
- 14 days - until their self-imposed tax timeline
- Looming: DACA, debt ceiling (December 8 expiration, extended to January with extraordinary measures), and Iran deal legislation deadline
PULLING THE TRIGGER: Senate Majority Leader Mitch McConnell postponed Senate votes last night, calling the session at 9:15PM so Senators and staffers would have time to work on the bill before they convene at 10AM today with the first vote expected an hour later. McConnell was forced into this position when the Senate Parliamentarian ruled against including the trigger mechanism proposed by Senators Bob Corker (R-TN) and Jeff Flake (R-AZ). Leadership is working to appease the deficit hawks who want to reduce the price tag from $1.4T to about $1T especially after the JTC score yesterday showed the deficit will still increase by $1T even with economic growth. However, that’s a big reach for only two people and could tip the balance of the carefully crafted bill. McConnell can afford to lose only two votes - and may be better off working on the third holdout - Senator Ron Johnson (R-WI) who wants to eliminate a SALT deduction for C Corps to pay for increasing the pass-through deduction from 17.4-25%.
MORE TO COME: So far Republicans have offered dozens of amendments as have Democrats, but theirs were mostly to derail tax reform - repeatedly demanding votes to commit the bill (send it back to Committee) throughout the debate. Senator Susan Collins (R-ME) introduced four amendments: preserving an individual’s SALT deduction on properties for up to $10K, preserving retirement benefits for those in service, preserving a medical expense deduction for expenses greater than 7.5% of income, and modifying the child tax credit. Senators Marco Rubio (R-FL) and Mike Lee (R-UT) modified the child tax credit further, but want a pay-for in terms of a 22% corporate tax rate. And, Senator Lisa Murkowski (R-AK) was able to shape the Arctic National Wildlife Refuge Provision to fit within the Byrd rule - one of the many factors making a Senate bill so complicated to finish. McConnell is confined to these strict (and quirky) rules all while trying to appease the variety of needs from 50 Senators and keep the deficit from exploding.
STAY TUNED FOR UPDATES FROM MACRO POLICY THROUGHOUT THE DAY.
LOOMING LARGE: Congressional leaders still have to come to a deal on year-end spending. The House sent over the Appropriations bills almost three months ago with no movement from the Senate. Senators are preoccupied with tax reform and haven’t even bothered to put together a measure to delay the deadline and avoid a government shutdown. House Speaker Paul Ryan plans to introduce legislation delaying the CR expiration until December 22. Republicans need support from the Democrats to move this forward, giving the Democrats leverage to get a DACA deal or allow a government shutdown - a terrible political fate for Republicans (especially in the middle of tax reform). DACA does have bipartisan support and is an area where a deal can really get done - if not, they will have to make a deal on budget caps and extend the CR further. While leadership insists January is the furthest out it will go, March may make a lot more sense now that the debt ceiling extraordinary measures are expected to last that long - one fiscal cliff is much better than two.
INSIDE THE SUPREME COURT: Our Senior Telecom Analyst Paul Glenchur will be inside the Supreme Court Monday as they hear arguments in the case about State’s rights to regulate sports betting. Stay tuned for more information on a call with our gaming and lodging team.
OPEC’S WIN-WIN DECISION MAY ALSO BE WIN FOR US SHALE: Our Senior Energy Analyst Joe McMonigle wrote Saudi Arabia gets full year extension; Russia can tell its oil companies we are only committed to cuts through June. Read the full piece here.
CALL REPLAY: OPEC PANEL DISCUSSION LIVE FROM VIENNA: Our Senior Energy Analyst Joe McMonigle hosted a panel discussion live from Vienna. Topics included: OPEC’S next steps, geopolitics and oil markets. Listen to the replay here.
RIDING OUT #ACATAPER IN MANAGED CARE? CMS TAKES AIM AT PART D PLANS: UNH, CVS, HUM, ESRX , AET, ATHM: Our Senior Health Policy Analyst Emily Evans wrote that CMS is edging up to a proposal to require a portion of $25B in drug manufacturer rebates to be passed on to Part D plan members. Read the full piece here.
