NOW, BACK TO THE BUDGET: Congressional leaders will huddle with top Administration officials in Speaker Paul Ryan’s office today to deal with the ongoing budget saga they’ve been saddled with since last spring. Minority Leader Chuck Schumer and Minority Leader Nancy Pelosi are prepared to do battle over domestic spending levels, DACA and other issues where Democrats have held their fire. Ryan and Majority Leader Mitch McConnell may cede ground on the spending front (to the chagrin of conservatives) in the hopes that the Democrats will blink and deal with the DACA fight another day. One way or another, the immigration issue and other Democrat priorities won’t evaporate and Ryan and McConnell need their votes for the stalemate to end. Did we mention the budget process for 2019 is just a few months away?
TAX TIME: The tax bill took effect two days ago and consumer behavior is already changing. Companies are announcing larger bonus plans, employees are adjusting their withholdings, and high-tax States impacted by the new SALT provisions are looking for ways to lessen the blow. Congress is now focused on a smooth implementation and the IRS is focused on issuing guidance on the new policies. Though accountants will be busy over the next three months, they have a full year before filing taxes under the code to understand the bill. In the meantime, companies will change their practices as tax experts begin to analyze the individual effects of each provision.
FOCUS ON FINANCIALS: With major tax legislation passed, Congress is working on their new agenda of financial reform. McConnell plans to vote on the bipartisan bill to rollback elements of Dodd Frank passed by the Banking Committee last month. The House is planning to use the Congressional Review Act to reverse the payday lending rule from the CFPB. And the CFPB is changing direction with their new Director Mick Mulvaney. Mulvaney has already eased reporting requirements, enforcement of regulations, and backed off several investigations and lawsuits. However they do it, Congress and the Trump Administration are squarely focused on financial deregulation in 2018.
SCRUBBING TRADE POLICIES: The Office of the U.S. Trade Representative (USTR) will meet today to come up with recommendations for President Trump with regard to washing machine tariffs. GE and Whirlpool have been pleading with Senators and Representatives from Ohio and Michigan to combat foreign washing machine producers such as Samsung and LG. GE and Whirlpool claim these companies evade taxes and are unfairly subsidized. Congress is now putting pressure on the USTR to conclude that the trade practices are a national security threat as they did with solar parts. A protectionist conclusion would not be surprising for the America First Administration.
MEDICARE ADVANTAGE ADVANCE NOTICE PART ONE | CONTINUING SLOW ROLL TO REPLACE FFS - HUM, AET, UNH, ANTM: Our Senior Health Policy Analyst Emily Evans writes the unusually early notice implements risk adjustment for chronic disease and mental health diagnosis as required by 21st Century Cures Act. Read the full piece here.
REITS TO THE RESCUE? A TAX REFORM IMPACTS | HCA, THC, CYH, LPNT, HCN, MPW: Our Senior Health Policy Analyst Emily Evans writes the interest deduction limitation is bad news for most hospitals, but REIT exclusion offers a strategy of sorts. Read the full piece here.
TRUMP RAISES IRAN TOUGH TALK AS JAN 12 OIL SANCTIONS WAIVER DEADLINE APPROACHES: Iran protests raise the likelihood of Trump denying a waiver on Iran oil sanctions. A catalyst for U.S. sanctions on one million b/d of Iran crude exports. Read the full piece by Senior Energy Analyst Joe McMonigle here.
