REPEAL AND REPLACE? Wait, wait, wait - not Obamacare this time. In one of his last moves before retiring from the House, Financial Services Committee Chairman Jeb Hensarling (R-TX) and Rep John Delaney (D-MD) yesterday released a ‘discussion draft’ repealing Fannie and Freddie and replacing the GSE’s with Ginnie Mae overhauling the nation’s housing finance system. Hensarling said his Bipartisan Housing Finance Reform Act “will repeal the GSEs’ charters, permanently ending their monopoly, and transition to a system that allows qualified mortgages backed by an approved private credit enhancer with regulated, diversified capital resources to access the explicit, full government securitization guarantee provided by Ginnie Mae. The plan will preserve much of what is demanded in the current system: liquidity, the TBA market, and the 30-year pre-payable fixed mortgage. And it will do so while dispersing risk and leveling the playing field for all entrants into mortgage finance.” Hensarling is aware that only a few weeks remain before the House adjourns for the mid-terms but hopes his measure will serve as a starting point for the next Congress.
TAX CUTS – ROUND II: The House Ways and Means Committee plans to mark up a second round of tax cuts next week, according to W+M Chairman Kevin Brady (R-TX). "Tax reform 2.0" would make permanent individual tax cuts, which are set to expire after 2025, and provide incentives for both businesses and taxpayers. Brady says he anticipates that the second round of tax legislation will come to the House floor by October 1. The centerpiece of 2.0 will be a provision to make permanent individual tax cuts (expiring in 2025) as well as the temporary cap on deductions for SALT. Members from high tax states like New York and New Jersey are balking at 2.0 given the SALT provision jeopardizing passage in the full House. The legislation also includes a provision to expand savings-related tax breaks. Should the bill muster enough support in the House, it will still end up DOA in the Senate, but as we indicated earlier in the summer, 2.0 will be a sorely-needed prop on the Republican campaign hustings.
IF A TREE FALLS IN THE FOREST...: With yesterday’s deadline to submit comments to the Commerce Department now behind us, the National Retail Foundation and 150 trade organizations signed onto a letter to U.S. Trade Representative Robert Lighthizer urging the U.S. government to back down from its plans to impose tariffs on $200 billion worth of Chinese goods. The coalition, which represents a number of industries including manufacturers, farmers, technology and natural gas companies, said escalating the trade war "only serves to expand the harm to more U.S. economic interests."
TAR HEEL TRIAGE: A panel of federal judges, which ruled last week that North Carolina's congressional districts are unconstitutionally gerrymandered, reversed course and decided that congressional elections in the state would proceed on November 6 with the same district lines, citing "insufficient time" to approve a new map.
TECH TALK: Join Hedgeye's Paul Glenchur and Hesham Shaaban today at 12:30 pm ET as they briefly survey the current state of regulatory and antitrust threats to leading social media and tech platforms. This week's Congressional hearings (featuring top executives of Facebook and Twitter, and an empty chair for Google) and criticism from President Trump highlight rising political pressure to regulate dominant tech platforms. What are the genuine threats and how could it all play out? Find the call-in information here.
POLITICAL PRESSURE ON FACEBOOK, TWITTER AND BIG TECH | (FB, TWTR, GOOGL, AMZN): Paul Glenchur writes that Regulatory risk is rising for Facebook, Twitter and major tech platforms but tangible government intervention is a work in progress. read his piece here.
U.S. SANCTIONS ON VENEZUELA OIL OFF THE TABLE | Despite media report that suggests coming sanctions, White House not interested in new actions that could raise gasoline prices. Read Joe McMonigle's piece here.
