NICE WORK IF YOU CAN GET IT: House Republicans left town a day early yesterday given the dearth of legislative activity on their plate. There are still a number of must-pass bills Congressional Republicans need to navigate: Federal Aviation Administration funding, the Water Resources Development Act (some infrastructure spending here), the Defense Authorization Act, a farm bill (five-year cycle), and last but certainly not least, a government funding bill before current FY18 funding runs out on September 30. There is also a wish list of items Republicans want to tackle: tax reform part II, infrastructure, healthcare (opioids), workforce development (aka welfare reform), Dodd-Frank reform and maybe even entitlement reform. When running through some of these ‘wish list’ agenda items with a Senator yesterday he simply said “tell them there are only 51 of us” – which we keenly interpreted as there is no way the Senate can consider or pass some of these measures with such a slim margin, what are they thinking?
Conservatives are already sending shots across Speaker Paul Ryan’s bow with regard to passing another mammoth spending bill along the lines of the $1.3 T Omnibus passed last month – raising the bar for success in his final months and with the September 30 deadline coming just weeks before the midterms. And Trump has made it well know that he won’t sign another bill of that size and scope - so it’s likely the letters “CR” will reenter our vernacular soon after Labor Day.
LOOMING LEADERSHIP RACES: While the gears of legislating will be winding down over the next two months, leadership races on both sides of the aisle will be heating up behind closed doors and maybe even spilling out into the public eye. The race to succeed Ryan will continue unabated with Freedom Caucus conservatives already positioning their bloc to extract guarantees from Majority Leader Kevin McCarthy for their support. And, while the Democrats don’t yet have a vacancy to fill, the young(er) guns in their caucus are chomping at the bit for new leadership given that their current top three leaders are in their late 70’s. The thinking goes that if the Democrats don’t take the House, Minority Leader Nancy Pelosi and her team are gone. And, should the Democrats manage to take the House, you can bet Pelosi and company will be keeping tabs on the influx of new Members coming in who – like newly-elected Rep Conor Lamb (D-PA) – promised not to support Pelosi if elected.
TAXING SITUATION: We wrote about Republican division over the rescissions package with billions in program cuts targeted and, despite Senate opposition to the measure, unflinching OMB Director Mick Mulvaney is on track to deliver the Trump Administration’s list this week. But another split between the House and Senate has emerged with another legislative round of tax cuts targeted to the middle class germinating in the House - with Ryan aiming for a June or July vote. Senate Majority Leader Mitch McConnell is inclined to “take a look at it” saying yesterday that he “would like to make the individual tax cuts permanent,” but is finding resistance from his fellow Senators and the Republican campaign arm of the Senate. The fear is that a vote on individual/middle-class tax cuts would more than entice red-state Democrats up for reelection to vote for such a measure – giving them an opportunity to deflect ongoing and future attacks from their Republican opponents given Democratic opposition to the 2017 tax reform law.
GUTTING GUIDANCE?: The Senate adopted a resolution by a vote of 51-47 to rescind 2013 Consumer Financial Protection Bureau guidance aimed at preventing auto-lending discrimination, with Senator Joe Manchin (D-WV) as the only Democrat to vote in favor of the legislation. The resolution, which is likely to be taken up by the House soon, is an expansion of the type of regulation and timeframe for which Congress has used the Congressional Review Act, which was previously limited to use for formal regulations a short period of time after they were finalized. Look for Republicans to continue down this “guidance” path in the coming months to chip away at regulatory overreach.
BRINGING THE HAMMER DOWN | CMS PROPOSES MORE REPORTING OF DIR FEES IN PART D | CVS, DPLO, HUM, UNH: In what can only be a set up for point of sale rebates for Part D beneficiaries, CMS proposes new guidance requiring more detailed reporting. Read the analysis by Emily Evans here.
XI FOR LIFE: General Dan Christman writes on two ground-shifting events that have taken place over the last months that have the potential to fundamentally alter U.S. relations with the Sinic and Muslim worlds. You can read his note here.
TRUMP ADMINISTRATION ON TRACK TO OUTSPEND REAGAN BUILDUP: General Emo Garder writes that DoD's topline for FY2019 is a foregone conclusion but breathtaking in its aspiration. Read his insight here.
PROGRAMMING NOTE: WE'RE BACK ON MONDAY.
