OMNIBUS FINAL, MAD RUSH BEGINS: Congressional leaders reached a deal on the $1.3T Omnibus spending bill with lukewarm support from President Trump and with little time to spare before the government shuts down. Their fast-track plan is to pass the measure in the House later today (possibly trickling into Friday morning) and the Senate tomorrow – where one Senator can delay an already abbreviated process. Senator Rand Paul (R-KY) did this last time around and has given no indication that he won’t pull a repeat performance as he hasn’t read the 2,232-page bill. A short stopgap CR would be put in place in the event the stroke of midnight looms Friday without a final vote taking place on the Omni. The Omnibus includes $1.6 B for border security of which some funds will be earmarked to border fencing but falls way short of Trump’s original $25 B border wall request. The grain glitch will be solved, but no other tax reform ‘fixes’ are contained in the measure. NICS made the cut at the last minute and the Gateway project will still be eligible for federal funding, but under a different scheme than originally proposed. Overall the bill gives both parties major victories as Republicans won a $78 billion increase in military spending over 2017 levels with the Democrats securing a $52 billion increase for domestic programs. The full text of the Omnibus here.
Below are the fiscal 2018 spending levels for each of the 12 Appropriations subcommittees:
- Agriculture: $23.259 billion (up from $20.88 billion in fiscal 2017)
- Commerce-Justice-Science: $59.6 billion (up from $56.6 billion in fiscal 2017)
- Defense: $589.5 billion base funding (up from $516.1 billion in fiscal 2017)
- Energy-Water $43.2 billion (up from $37.8 billion in fiscal 2017)
- Financial Services: $23.4 billion (up from $21.5 billion in fiscal 2017)
- Homeland Security: $55.6 billion (up from $42.4 billion in fiscal 2017)
- Interior-Environment: $35.25 billion (up from $32.28 billion in fiscal 2017)
- Labor-HHS-Education: $177.1 billion (up from $161 billion in fiscal 2017)
- Legislative Branch: $4.7 billion (up from $4.4 billion in fiscal 2017)
- Military Construction-VA: $92.7 billion (up from $83 billion in fiscal 2017)
- State-Foreign Operation $54 billion (up from $53.1 billion in fiscal 2017)
- Transportation-HUD: $70.3 billion (up from $56.474 billion in fiscal 2017)
TRUMP TARIFFS TAKE II: In what’s expected to be Trump’s most aggressive move yet targeted to the $375 B U.S. trade deficit with China and intellectual property theft, he will announce ~$50 B in tariffs on over 100 imported Chinese goods and products spanning dozens of companies. Additionally, the Trump Administration is seeking to curb Chinese investments in the U.S. The Chairman of the President’s Council on Economic Advisers, Kevin Hassett, has reportedly been running algorithms to calibrate tariff rates on the Chinese products with the intent of minimizing the impact to the U.S. consumer. U.S. Trade Representative Robert Lighthizer will run point on Chinese tariffs utilizing Section 301 and Secretary Steve Mnuchin and his team at Treasury are said to be preparing a measure aimed at Chinese investments. The Chinese are said to be preparing retaliatory tariffs of their own targeted in the heart of Trump country and industries and agriculture situated in those states.Trump originally planned on making the announcement tomorrow but moved the timeline to today at 12:30 pm. Subject to change, of course. We’ll be hosting a flash conference call tomorrow at 11:30 am with the former Assistant U.S. Trade Representative for China Affairs. Details to follow this morning.
GUEST SPEAKER CALL ON MLP'S AND INCOME TAXES: Find the replay and takeaways here.
AT+T/TIME WARNER | TRIAL KICKS OFF FAVORABLY FOR AT+T (T, TWX): The court seems inclined to reject admissibility of some key FCC filings and other evidence backing DOJ's vertical foreclosure theories. Read Paul Glenchur's latest from the court here.
WHITE HOUSE ISSUES BAN ON VENEZUELA PETRO-CURRENCY SCHEME | Joe McMonigle writes that oil sanctions are still on the table but paused due to Tillerson/Cohn departures. His piece here.
CALL REPLAY | USH, ACHC AND AAC AND THE FEDERAL/STATE RESPONSE TO THE OPIOID CRISIS: Listen to our healthcare team discuss rapidly changing Federal and State payment policies and what they mean to AAC, ACHC and UHS. Check it out here.
KIM, TRUMP AND A PEACE PRIZE: Read General Dan Christman's latest piece on the machinations surrounding North Korea here.
AT&T/TIME WARNER | KEY AREAS OF FOCUS (T,TWX): The DOJ challenge goes to trial this week. AT&T is still the favorite, but investors should focus on the government's core strategies. Read Paul Glenchur's latest here.
CALL REPLAY | ROLLING BACK DODD-FRANK: Last week, the Senate passed the bipartisan ECONOMIC GROWTH, REGULATORY RELIEF, AND CONSUMER PROTECTION ACT (S. 2155) sponsored by Senate Banking Committee Chairman Mike Crapo by a vote of 67-31. The path to the measure becoming law is uncertain as negotiations with House Financial Services Chairman Jeb Hensarling have hit an impasse. We discussed the Senate deregulation bill, convergence with Hensarling's efforts and next steps. CLICK HERE to listen to a replay of the call.
