"Somebody Screwed Up" - House Must Vote Again On Tax-Reform Plan After Procedural Snag

Update: In an interview with MSNBC"s Chuck Todd, Louisiana Senator John Kennedy offered the most honest explanation yet for the Senate Parliamentarian finding that three provisions in the final Trump tax bill violate Senate budget rules - meaning that the House will need to hold another vote on the bill.

"Somebody screwed up," Kennedy said.

Still, Kennedy reiterated that observers shouldn"t read too much into the delay. Republicans have been scrambling to put the bill together and pass it before the end of the year - a notably tight deadline. Some exhausted staffer was probably responsible for the oversight, he suggested.

"We have the votes, we"ll have the votes tomorrow. If necessary, we"ll have the votes the day after that," Kennedy said on MSNBC.

The Senate is still expected to vote on the bill Tuesday night after removing the offending provisions.

* * *

In an embarassing reversal of what House Republicans had celebrated as a done deal, the House will need to vote again on the final version of the tax reform plan passed earlier this afternoon. The second vote is the result of a technicality in one of the bill"s provisions. According to Bloomberg, the Senate parliamentarian found three provisions in the final bill that violate the Byrd Rule, and the Senate will have to strip them from the bill before passing it, according to Bernie Sanders, the top Democrat on the Senate Budget Committee, and Oregon Senator Ron Wyden, who had earlier hinted that he was looking into possible Byrd Rule violations.

Then the House will need to hold a second vote on the newly modified bill.

“It is our intention to raise a point of order to remove these provisions from the conference report and require the House to vote on this bill again," Sanders said. The House now expects to take another vote on the tax bill tomorrow morning, according to email from majority leader’s office; that vote would clear the bill for Trump’s signature, assuming the Senate passes the bill with the required changes later this evening.

According to the Byrd Rule, lawmakers can challenge provisions in a bill if they would significantly add to the deficit. Democrats have identified three such provisions.

Republicans brushed off the delay as a minor inconvenience. Kevin Brady, the chairman of the Ways and Means Committee, said they weren"t a big deal. However, Brady told CNBC that it"s unclear how this will impact the vote on the stopgap spending bill that must be passed before Friday at midnight or the federal government will enter a Christmas shutdown.

One of the provisions is related to a detail in the bill that would benefit a private college in Kentucky. Another would allow families to use tax-advantaged 529 accounts for home-schooling expenses, according to the Associated Press.

"Members are advised that we expect Senate Democrats to insist on a Byrd Point of Order on the Conference Report to Accompany H.R. 1, which is likely to be sustained," said guidance from House Majority Whip Steve Scalise"s (R-La.) office, which was sent to GOP lawmakers, according to the Hill.

"As such, Members are further advised that an additional procedural vote on the Motion to Concur is expected tomorrow morning, which will clear the bill for President Trump’s signature," his office added.

The second vote will likely take place on Wednesday, and is expected to pass, according to CNBC. However, the chance that the wheels could fall off at the last minute can never be ruled out.

Earlier, the House approved the tax plan in a 227-203 vote with 12 Republicans joining all the Democrats in opposition.

Stocks Pop After Cornyn Suggests Tax Bill Deal "Possible" Today

Despite numerous headlines indicating a tax bill deal early next week, Republican Senator John Cornyn just told media that there "may be a tentative tax bill deal today." Algos liked the news and immediately bid stocks higher (despite no knowledge of what is in the "deal").

“It’s possible,” John Cornyn, the No. 2 Senate Republican, tells reporters of tax bill, according to Bloomberg.

 

The Senate has “ping-ponged” offers back and forth with House and is making good progress, he says.

And stocks popped on it...

 

Of course, its also "possible" that the deal is not done today... and that"s why we were intrigued to see "high tax" stocks underperforming...

The main areas of contention: AMTs and treatment of SALTs (Republicans were planning to tweak corporate rate from 20% to 21-22% to pay for some of the changes but this idea is facing fierce resistance from the business community – Washington Post).

Brady Says Compromise Likely Coming Friday (reported at 1035ET)

House Ways and Means Chairman Kevin Brady, who’s overseeing the House-Senate conference committee for tax negotiations, said the panel will likely come to an agreement on final legislation by Friday.

“We are on track for this week,” Brady told reporters, referring to a so-called conference report.

Conference reports generally go point-by-point through areas of disagreement and say how each was resolved. For example, if the House position on a provision is the one they’ve agreed on, the report will say that with respect to that provision, the conferees propose that the Senate recede from its position and concur with the House’s position.

House Majority Leader Kevin McCarthy told GOP members the goal is for the House to vote on the tax bill next Tuesday, Dec. 19, according to Representative Lamar Smith of Texas.

Representative Tom Cole of Oklahoma said he heard that the goal was Tuesday, but there wasn’t an announcement about it directly.

“The time frame of a vote next week is very realistic,” said Representative Tom Reed of New York. -- Erik Wasson

Republican Leaders Say GOP Has The Votes To Pass Tax Plan

Update: Mitch McConnell has confirmed that the Republicans have the votes to pass the Senate"s tax-reform plan. McConnell"s comments put a slight bid back in stocks, which have fallen sharply following Mike Flynn"s guilty plea.

 

McConnell says Republicans `have the votes" for Senate tax bill https://t.co/WdC1mWiyJd pic.twitter.com/cGbSwodXxx

— Shailendra Nair (@shailendra_nair) December 1, 2017

              

* * *

John Cornyn, the No. 2 man in the Republican Senate leadership, said Friday that they have secured enough votes to pass the Senate version of the Republican tax reform bill, according to the Washington Post. Earlier in the morning, James Lankford of Oklahoma and Jerry Moran of Kansas, both said they’d support the bill, but Maine’s Susan Collins had said she’s still unconvinced. Hours later, Lindsey Graham echoed his claims.

Sen. Ron Johnson of Wisconsin said he planned to back the bill after announcing last week that he would vote against it because it didn’t provide enough tax relief to taxpayers who use the pass-through rate. Steve Daines of Montana, who objected to the bill on similar grounds, also said he’d vote for the bill.

Cornyn said the leadership had “at least 50” votes, but are working to secure one more ‘yea’ vote to provide a buffer against any surprises, like when John McCain voted to kill the senate’s repeal and replace plan over the summer.

Speaking with reporters outside of a meeting with the Republican caucus,Cornyn said “We have at least 50, and we’re still working."

The comments from Cornyn, the second-ranking Republican in the Senate, came just hours after Sen. Ron Johnson (R-Wis.) said he planned to back the bill. He was one of the final holdouts, though the GOP needed a little more help to ensure they had the 50 votes they needed. Cornyn did not say who else had committed to support the package.

 

Johnson’s support followed a late night of negotiations, following a standoff on the Senate floor Thursday when Johnson and two other members aired concerns about the bill.

 

He has long complained that the tax cut package does not provide enough benefits for a certain type of business, though he has requested numerous changes in recent days and it could not be immediately learned what precisely made him decide to back the bill.

 

Support from the Wisconsin Republican is a boost for Senate Majority Leader Mitch McConnell (R-Ky.), but GOP leaders still need to win backing from at least one more holdout before they can be assured they have enough votes to pass the bill.

Unsurprisingly, Tennessee’s Bob Corker and Arizona’s Jeff Flake were two of the last confirmed holdouts. Both men were pushing measures that would reduce the bill’s impact on the deficit by paring back some of the proposed cuts. As the Post points out, the two men represent a unique challenge for the Republican leadership because they aren’t running for re-election.

Collins has suggested that she plans to support the tax package, but she is insisting on several changes of her own, including a plan to allow Americans to deduct up to $10,000 in property taxes and an expansion of the child tax credit. Collins already helped vote against the Republican repeal and replace plan and has a history of voting against tax cuts.

GOP leaders were meeting in McConnell’s office Friday morning to try to resuscitate the bill after a proposed trigger that would raise taxes if revenue targets were missed was rejected by the senate parliamentarian.

“I think Senator [Steve Daines (R-Mont.)] and Senator Johnson are supporting the bill, and we’re working hard to get the last two members we think we need to get onboard - Senator Flake and Senator Corker,” said Sen. John Cornyn, the second-highest ranking Republican in the Senate.

 

Sen. John Thune (R-S.D.) was also attending the meeting in McConnell’s office. As he entered, he told reporters that lawmakers were still trying to figure out how to resolve the concerns raised by Corker and Flake. Corker had wanted to put a provision in the bill that would automatically raise taxes after five years if the growth projections that GOP leaders had promised did not come to fruition.

 

The tax increases would kick in through a “trigger” mechanism that was somehow tied to economic growth.

 

But the Senate’s parliamentarian told Corker on Thursday evening that there were issues with how the trigger would be designed. GOP leaders then had to decide whether to try to craft a new trigger or simply add new taxes back into the bill to lessen the impact on the debt.

 

On Friday morning, Sen. Orrin G. Hatch (R-Utah) said, “I think we’re doing real well.” When asked whether he believed Republicans had the votes to resolve the trigger issue, Hatch said, “I think so.

Corker and Flake are pushing for as much as $350 billion in tax cuts to be reversed if Republicans want the final bill to pass. There’s still no guarantee that the bill makes it to Trump’s desk - it will need to go through the reconciliation process, then be passed against by both the House and Senate.

Republican leaders are hoping to take the vote tonight.
 

Senate Bill Nearly Killed By Deficit Hawks: Will Include $350 Billion In New Tax Hikes

Following a report from the Joint Committee on Taxation, which unveiled late on Thursday afternoon that the Senate Tax bill would generate enough economic growth to lower its $1.4 trillion revenue cost by only about $458 billion over a decade - in other words it would still boost the deficit by roughly $1 trillion - in a dramatic showdown on the Senate floor, GOP leaders agreed to effectively increase taxes by $350 billion in response to a procedural ambush by deficit hawks led by Sen. Bob Corker that nearly killed the GOP tax reform bill.

According to Bloomberg, Senator David Perdue, a Georgia Republican, said that GOP Senators are "discussing a new compromise for their planned tax overhaul that would increase taxes in future years."

David Perdue

Quoted by The Hill, Senate Republican Whip John Cornyn told reporters after a round of intense discussions on the floor, “we have an alternative, frankly, tax increase we don’t want to do to try to address Sen. Corker’s concerns.”  Cornyn said the details of the proposal are being worked out.

Corker had insisted on a "trigger" proposal that would have rolled back tax relief in case economic projections fell short of expectations; the flipside is that it would have also made any recession in the near future far worse by staggering tax increases just as the economy slowed down, in the process sending the deficit soaring and accelerating the economic contraction.

And in an unexpected, 11th hour reversal, the Senate parliamentarian ruled Tuesday afternoon that the trigger would not pass procedural muster. “It doesn’t look like the trigger’s going to work according to the parliamentarian,” Cornyn said. Cornyn’s remarks came after an hourlong standoff on the Senate floor in which three Republicans - Corker, Ron Johnson and Jeff Flake - held up a procedural vote that would have sent the measure back to the Senate Finance Committee.

At least two of those members, senators Bob Corker of Tennessee and Jeff Flake of Arizona, had backed the trigger concept in recent days. Corker The deficit hawks threatened to vote for a motion to recommit the tax bill back to the Finance Committee. That move would have put the legislation in limbo for the foreseeable future and scuttled an all-night voting session on tax relief.

As The Hill adds, Republican leaders appeared extremely frustrated with Corker, Flake and Johnson during their intense discussions on Thursday night while the fate of the bill teetered in the balance.

McConnell’s face grew flushed as he huddled with Corker and Sen. Pat Toomey (R-Pa.), one of the main architects of the tax reform bill, while GOP colleagues crowded around them to listen in. Johnson said he joined Corker’s rebellion so he could win an assurance from GOP leaders about getting a vote on setting the corporate tax rate above the 20-percent level favored by President Trump.

Ultimately the hawks allowed the floor debate to continue, but it’s unclear whether or how their demands might be met. Meanwhile, Senator David Perdue said the estimated tax increase would be $350 billion over a decade. Cornyn told reporters that the size could be even larger. Senator Ron Johnson of Wisconsin said he held out as well, to ensure he can offer amendments, including one to raise the pass-through deduction to about 25%, paid for by eliminating the corporate deduction for state and local taxes.

Quoted by Bloomberg, Johnson said he doesn’t know if senators will finish the bill Thursday night. “We just saw a kink in the time plan right there so who knows what other cogs might be put in this wheel,” he said.

Republican Senator Lindsey Graham added: “I think you’re going to see a lot of these scrums, and here’s the way they’ll end: We’ll pass the bill sometime tomorrow.”

For the sake of the parabolic market, he better be right. 

In Critical Test Of Tax Reform Bill, Senate Narrowly Approves Motion To Start Debate With 52-48 Vote

Update (5:55PM EST): After a full day of debating the GOP tax reform bill, the Senate has now approved a motion to...drum roll please...debate the GOP tax reform bill.  As we detailed below, this was the first big test for the GOP"s tax bill before the entire Senate and it narrowly passed with a vote of 52-48.  No Democrats voted in favor of the procedural motion to begin debate and all Republicans towed the party line.

Of course, the GOP"s efforts to repeal and replace Obamacare also managed to survive this very same procedural vote earlier this year only to be killed at the last minute by John McCain. Which begs the question of whether the current tax reform bill will finally hand the Trump administration its first legislative victory or if it will meet the same fate as the numerous healthcare failures that preceded it...we should know later this week when the Senate is expected to vote on the legislation.

* * *

Update (3:15PM EST): Senator Lisa Murkowski (R-AK), who was a key swing vote against several Obamacare repeal and replace bills earlier this year, has confirmed that she will vote in favor of the Senate"s tax bill.

Alaska"s Sen. @lisamurkowski will vote YES on the GOP tax bill, her office tells me.

— Garrett Haake (@GarrettHaake) November 29, 2017

Meanwhile, an earlier holdout on the procedural vote expected to be held within the next couple of hours, Senator Steve Daines (R-MT), has just confirmed that he"s now a "yes"...at least for the motion to proceed to debate.

[1/2] There has been some good progress for Main Street businesses in the tax cut bill. I was able to secure more than 60 billion in tax cuts for Main Street businesses. These Main Street businesses will be able to provide more jobs and higher wages in Montana and across the

— Steve Daines (@SteveDaines) November 29, 2017

[2/2] country. I"ve seen enough progress to vote yes to move the debate forward.

— Steve Daines (@SteveDaines) November 29, 2017

* * *

Update (2:45PM EST): Although no official time has been provided, according to The Hill, Senator Tom Tillis (R-NC), who presided over the Senate floor during lunch, said he expected a vote on the tax bill in the 4 - 5pm EST timeframe.

Meanwhile, Senator Susan Collins (R-ME) has just confirmed she will support the procedural vote for tax reform today but is still on the fence regarding her final support of the legislation.

*GOP SENATOR COLLINS SAYS SHE WILL BE A "YES" ON TAX BILL MOTION TO PROCEED

*SEN. COLLINS SAYS SHE"S NOT YET A `YES" ON FINAL VOTE ON TAXES

* * *

Just yesterday a 12-11 party-line vote in favor of the tax reform bill by the Senate budget committee allowed Mitch McConnell to breathe a temporary sigh of relief after earlier objections by GOP members left many wondering whether the bill would even make it out of committee. 

Now, the controversial legislation is set for its first key test before the entire Senate after McConnell just confirmed that a crucial procedural vote intended to allow debate on the bill has been scheduled for later this afternoon.

As expected, McConnell says the Senate will vote later today on the Motion to Proceed to the GOP tax reform bill.

— Frank Thorp V (@frankthorp) November 29, 2017

Of course, the bill will need at least 50 votes to pass, with Vice President Mike Pence breaking a potential tie; Republicans hold 52 seats in the chamber, and no Democrats are expected to support the bill.

As the Wall Street Journal notes, key, last-minute modifications to the bill that allow for tax increases in the event of deeper deficits managed to attract the support of several key Senators who had previously been on the fence.

One group of senators that were on the fence and now appear set to support the bill are lawmakers concerned about the federal deficit. Led by Sens. Bob Corker (R., Tenn.), James Lankford (R., Okla.) and Jeff Flake (R., Ariz.), the group has been working on a plan to trigger automatic tax increases if the tax cuts lead to deeper deficits. By Wednesday, the deficit hawks sounded optimistic and said the details of a deal were closer to being worked out.

 

New details about the design of the fallback plan could mitigate some concerns. Republicans briefed on the plan said that it could be designed in a way to keep the backup plan from activating in the event of an economic recession. For it to work, the government would have to distinguish between a slowdown in tax revenue caused by tax cuts and a slowdown that is a normal feature of the economic cycle.

 

“We’re writing in a protection from recession so that way if there is a recession, the trigger turns off,” Mr. Lankford said on CBS. “The second part of that is if we do this large tax cut and we broaden the base of what’s happening economically, we better not have a recession at that point. This should actually charge up the economy.”

Meanwhile, Trump seemed confident yesterday after describing a GOP meeting on the legislation as "somewhat of a lovefest."

Trump calls today"s meeting with Republican senators "very special" and "somewhat of a lovefest" pic.twitter.com/QMc5kzBkz1

— Aaron Rupar (@atrupar) November 28, 2017

Of course, not all Republicans are onboard with the "lovefest" just yet at Senator Steve Daines (R-MT) still has some reservations over the treatment of pass-through income and Senators Mike Lee (R-UT) and Marco Rubio (R-FL) would like a slightly higher corporate tax rate to help fund a larger child tax credit for low-income families.

Still, not every Republican is ready to vote yes. Sen. Steve Daines (R., Mont.), who is concerned about the treatment of partnerships and other “pass-through” entities whose earnings pass through to individual owners’ tax forms, said that he wasn’t quite ready to cast a vote to allow the tax debate to begin.

 

Separately, Republicans were planning to try to make more changes to the tax bill by offering amendments later this week.

 

Sens. Mike Lee (R., Utah) and Marco Rubio (R., Fla.) are proposing an amendment to the tax bill that would increase the child tax credit for low-income families and pay for it by setting the corporate tax rate at 22%, instead of 20%.

 

That amendment would make the child tax credit fully refundable against payroll taxes and index the tax credit to inflation. Refundable tax credits go to households that don’t pay income taxes.

Passage of this key procedural vote today could setup the Senate to pass whatever modified version of the bill comes out of debate by Thursday or Friday of this week.

We will provide updates on this crucial procedural vote as they develop throughout the day.

In Win For White House, Rand Paul Says He Will Vote "Yes" On Tax Reform

In a surprising reversal that President Donald Trump will undoubtedly tout as a major victory, Kentucky Senator Rand Paul has publicly confirmed that he will be voting ‘Yes’ on the GOP tax plan when the senate votes on it later this week.

Paul says he will vote ‘yes’ even though the tax overhaul “isn’t perfect” and he’d like to see a larger cut. In an opinion piece published on Fox News’s website, Paul explained the reasoning behind his change of heart in greater detail.

Ultimately, Paul said, he is voting ‘yes’ because the US tax code, which has 97 different federal taxes, must be simplified. Congress can always authorize more cuts at a later date. In fact, Paul says if the public will is strong enough, Congress could authorize a new tax cut every year.

Currently, there are at least 97 different federal taxes. The tax code that instructs people how they must hand over their hard-earned money to government spans some 74,000-plus pages.

 

This is absurd, and so is the fact that government will collect over $3 trillion from taxpayers next year but still is not satisfied.

 

One of the main differences between Republicans and Democrats is that Republicans, in general, favor less government and more tax cuts. That’s why I’m pleased to see us moving forward on a plan for tax cuts, and why I hope to vote to pass such a cut in the coming weeks.

Paul said he supports the Senate proposal to end Obamacare’s individual mandate penalizing people who don’t have health insurance, and that he would like to see preservation of some state and local tax deductions.

He also applauded his fellow senators for abandoning the concept of revenue neutrality, saying he’d like to see the tax cuts eliminate even more than the $1.5 trillion in revenues expected over the next 10 years, according to an analysis by the CBO. Paul said he’d be comfortable with a reduction in revenue of up to $2.5 trillion.

I spoke out all year against the GOP leaders’ initial plan to make their tax reform “revenue neutral” — meaning not really a cut. I’m pleased to see my point of view has prevailed, and the current tax plan calls for a $1.5 trillion cut over the next ten years. I would have liked to see more — in fact, I offered an amendment to move it up to $2.5 trillion — but I’ve stated many times that as long as it is a real cut, I’ll vote for it, even if it isn’t as large as I would prefer.

 

I’m also pleased to note that, in part by my urging, the Senate tax-plan writers have included repeal of the ObamaCare individual mandate in the tax plan. The mandate is clearly a tax, a fact that was established by the Supreme Court when it upheld ObamaCare. So including it in the tax bill only makes sense. In addition, with CBO scoring it as a $350 billion savings, repealing the mandate helped pave the way for increased middle-class tax cuts, like an expanded child tax credit.

Winning Paul"s vote has been a top priority of President Trump, who has often expressed admiration for the Kentucky senator even though Paul has, until this point, been one of the most obstinate opponents of the Trump agenda.

However, his support doesn’t guarantee passage for the tax plan: At least five other senators have either said they’re not voting for the bill, or that they’re on the fence. However, Fox News is reporting that a deal is in the works to add more deductions to the bill to help win over Wisconsin Senator Ron Johnson, who said two weeks ago that he would vote "no" on the bill. However, Susan Collins, Jeff Flake, Bob Corker and John McCain remain on the fence. And while Montana"s Steve Daines has raised hackles about the bill because, he says, it favors corporations over small businesses, he recently touted a "productive" conversation with Trump, and appears to be leaning toward a yes.

We now await Trump’s congratulatory response to Paul’s decision. It should be coming any minute now.

GOP leadership says they will bring the bill to a vote on Thursday. But of course, if they fail to rally support from Republican holdouts, that could change.

Senate Passes 2018 Budget Paving Way For $1.5 Trillion In Tax Cuts, Sending Yields, Dollar Sharply Higher

Senate republicans took a major, if relatively easy, step toward passing Trump"s tax plan on Thursday night with the critical passage of a budget blueprint that would protect a $1.5 trillion tax cut from a Democratic filibuster. Senators narrowly voted 51-49 to pass the fiscal year 2018 budget after a several hour-long marathon on the Senate floor. The budget resolution could also pave the way for opening up the Arctic National Wildlife Refuge in Alaska to oil exploration by ensuring that drilling legislation can pass with only Republican votes according to the NYT.

With a 52-seat majority, Mitch McConnell had a narrow path to getting the 50 votes needed to clear the budget through the upper chamber. But GOP leadership caught a break this week when Sen. John McCain, a holdout over defense spending, announced he would vote yes, and Sen. Thad Cochran, recovering from health issues, returned early to Washington.

The budget’s passage could keep Republicans on track to pass a tax package late this year or early in 2018. That said, there are still plenty of possible complications, not least of all bickering within the GOP over the final shape of the tax package - where the fate of state and local tax exemptions has still to be decided - as the following Goldman flowchart shows: the steps that were successfully passed tonight are shown in green.

The House could pick up the Senate-passed budget as early as next week and give final approval to parliamentary language protecting the Republicans’ coveted tax effort. If House Republicans instead insist on negotiating a compromise that melds the Senate and House budget plans, tax legislation could be delayed.

“Passing this budget is critical to getting tax reform done, so we can strengthen our economy after years of stagnation under the previous administration,” said Senate Majority Leader Mitch McConnell (R-Ky.).

The Senate gave its approval to the budget blueprint on Thursday night after considering a flurry of amendments, a tedious process that gives the minority party an opportunity to force the majority to endure politically difficult votes. One Democratic amendment that was rejected sought to stop tax cuts from going to the top 1 percent; another would have restored cuts to Medicare.

The Senate approved the budget after the previously discussed so-called vote-a-rama, a legislative whirlwind in which amendments are considered one after another

Giving tonight events an aura of fatalistic determinism, Senator Lindsey Graham, and a member of the Budget Committee, said "this is the last, best chance we will have to cut taxes,” and warned that the consequences would be ruinous if the party failed. “That will be the end of us as a party,” he said, “because if you’re a Republican and you don’t want to simplify the tax code and cut taxes, what good are you to anybody?”

Where things get laughable is when one considers the context of what just happened: In Congress, the annual budget resolution provides an outline of federal spending and revenues. The Senate’s blueprint, for the 2018 fiscal year that began Oct. 1, claims to achieve a balanced budget within a decade, assuming greater economic growth and using an accounting method that excludes Social Security. In order to erase projected deficits, it calls for trillions of dollars in spending cuts over the coming decade.But the cuts exist only on paper, without legislation to achieve them.

And as the GOP predicts that by 2028 US government spending will equal revenues, here is what will really happen:

 

Meanwhile, as Republicans played with excel"s "goalseek" function, Democrats sounded the alarm, warning that the aspirational cuts in the budget plan called for slicing more than $1 trillion from Medicaid and about $470 billion from Medicare over a decade. Unfortunately for Democrats, they have exactly zero say in the matter: Though Democrats have pleaded to have more say in the tax overhaul, parliamentary language in the budget resolution would allow Republicans to pass a tax bill without any cooperation from the minority party.

“Passing this budget is not a requirement for passing tax reform,” said Senator Gary Peters, Democrat of Michigan. “Passing this budget is only a requirement to pass a tax bill with as few votes as possible, without input or buy-in from members of the minority.”

For Republicans, the budget debate provided a moment to showcase their main goal in the coming months, which according to the NYT is approving an overhaul of the tax code for the first time in decades, which they hope will lead to greater economic growth. But before they can move ahead with a tax bill, the House and Senate need to agree on the same budget resolution. The House approved its budget resolution, which had long been stalled, on Oct. 5. The House budget also lays the groundwork for a tax bill, but, unlike the Senate’s approach, it calls for the legislation to not add to the deficit.

The House budget resolution also seeks more concrete action when it comes to cutting spending, instructing committees to come up with legislation that would produce at least about $200 billion in savings.

However, according to The Hill, a House GOP source says the amendment seems sufficient to avoid a conference committee between the two chambers, and allow the House to simply pass the Senate resolution.

Ultimately, however, the only reason why the vote passed so easily is because as the Hill explained, it doesn"t matter, and was merely viewed as a mere vehicle for passing tax reform

"This is the biggest hoax cast upon the American people ever that this budget process even exists. The only thing about this that matters is in preparation for tax reform," said Sen. Bob Corker (R-Tenn.), who voted for the budget.  Corker noted bluntly that he believes the budget doesn"t have a real-world impact and if he was chairman of the Budget Committee he would disband it. When a staffer told him he was about to miss an amendment vote, he shot back: "yeah, on a vote that doesn"t matter."

McCain, explaining why he would support the budget, added: “At the end of the day, we all know that the Senate budget resolution will not impact final appropriations.”

Then again, all of these nuances were lost on the shotgun headline scanning algos, which read that Trump"s tax plan is one step closer to passage and sent both the USDJPY...

... and 10Y yields surging...

 

With gold lower...

 

With Dow Futs up over 100 points...

... and the Fed cursing their fate, because as Dudley explained yesterday, the last thing the feed needs right now as it is desperate to avoid tightening fast, is a burst of wage inflation, something which Trump"s tax proposal, if it passes, will promptly lead to, crushing the Fed"s carefully laid plan to take years and years in unwinding it balance sheet and rising rates.

John McCain Says He Will Vote 'Yes' On Crucial Budget Bill

Confirming rumors that had circulated earlier in the day, Sen. John McCain said Tuesday evening that he would ‘yes’ on a budget bill that once passed will unlock reconciliation, allowing the senate to pass President Trump’s tax reform plan with a simple majority.

While it’s still unclear if the budget bill has enough votes to pass, McCain’s support is a crucial obstacle and follows similar declarations by Maine Sen. Susan Collins and Alaska’s Lisa Murkowski – two other holdouts who had opposed the Republican plan to repeal and replace Obamacare.

“For too long, draconian budget cuts to the military have crippled readiness and put the lives of our service members in danger,” McCain said in a statement. "At the end of the day, we all know that the Senate budget resolution will not impact final appropriations."

McCain had been holding out support based on an insistence that defense spending increase by billions of dollars. Final spending numbers for the year are expected to be negotiated between congressional Republicans, Democrats and the White House ahead of a Dec. 8 funding deadline, the Hill reported.

I support the budget resolution so we can get to #taxreform. But, we must negotiate a deal to lift caps on defense. https://t.co/z6WOoHAFMk pic.twitter.com/PgHXPmHry6

— John McCain (@SenJohnMcCain) October 17, 2017

McCain said that he will vote yes on the budget because he supports tax reform.

The Arizona Republican"s decision follows a public feud with Sen. Rand Paul over McCain’s push to increase military spending. Paul seems unlikely to be able to push his demand to cut $43 billion worth of "off-book" defense spending, or block the resolution"s passage, especially now that Mississippi Sen. Thad Cochran has returned from a medical leave, giving the Republican leadership more breathing room to advance the bill.

Hopes that the Trump administration would manage to pass tax reform by its self-imposed year-end deadline have dimmed in recent weeks as lawmakers criticized the administration"s nine-page outline, complaining that it would raise taxes on many members of the middle class while cutting taxes for corporations and the wealthy. President Donald Trump said yesterday during a press conference with Mitch McConnell that while the administration was shooting to pass tax reform by the year-end deadline, it took the Reagan administration "many years" to pass the last major tax initiative - suggesting that it wouldn"t be the end of the world if the plan doesn"t pass until next year.

Trump And McConnell Make A "Truce Of Necessity" To Save Tax Reform

Inbetween firing off tweets and defending his decision to end cost-sharing payments to insurance companies, sending healthcare stocks sliding and eliciting accusations of sabotage, president Trump reportedly swallowed his pride and did something he’s been loath to do for months: he called Mitch McConnell.

Axios is reporting that, after months of frosty distance that was the subject of an anonymously sourced New York Times scoop back in August and has occasionally spilled into public view, President Trump picked up the phone yesterday and called the Senate Majority Leader ahead of what’s looking like a make-or-break weak for Trump’s legacy defining, narrative sustaining tax-reform program.

While it may come as a surprise to some - such as Goldman, which still says odds of a tax deal are well over 50% - Axios says Republican insiders privately believe the future of tax reform looks bleak. But if Trump and McConnell can patch things up and work together, even temporarily, the GOP has a better chance at avoiding an embarrassing legislative shutout that could imperil the republican majority in Congress.

The stakes are high: after the House passed its 2018 budget resolution a week and a half ago, unlocking the special budget provision that will allow the senate to pass its reconciliation bill with only 51 votes, the senate bill has yet to be called to a vote. It must pass the senate this week or risk tanking the centerpiece of Trump"s legislative agenda. As Axios glibly surmises, “no budget, no tax reform.” Trump and McConnell had a productive conversation on the agenda, and bonded over their joint effort to nominate and confirm conservative judges across the country. Trump was reportedly upbeat and mentioned a Kim Strassell column in The Wall Street Journal, "Scalias all the way down," giving the president credit for "remaking the federal judiciary."

Furthermore, Axios reports that Trump and McConnell communicate more frequently than many realize. They also are said to trade intel such as whip counts. The president and majority leader are scheduled to eat lunch together at the White House on Monday.

Still, as Axios concludes, the truce is one of necessity. It doesn’t represent a meaningful thaw in frosty relations between Trump and the Senate GOP leadership, who the president blames for the biggest defeat of his administration by failing to repeal and replace Obamacare. Of course, Steve Bannon’s “war” with the establishment, a war being waged with the goal of “saving” the Trump presidency, has added further strain to the relationship. But in a sign that fickle Senate Republicans might finally be falling in line, Susan Collins of Maine said on ABC’s “This Week” on Sunday that she was leaning toward a ‘yes’ on tax reform.

Will the market buy, literally and figuratively, this latest diplomatic detente? For the answer, keep an eye on the relative performance of high-tax corps (to the S&P). As we showed on Friday, following a brief burst of euphoria in the last days of September, the market has once again given up hope that Trump can pull off the biggest tax reform package in decades.

Trump Signs Executive Order To Begin Unwinding Obamacare

Having failed to repeal (or replace) Obamacare in the Congress on three separate occasions, on Thursday morning Trump took matters into his own hands, when as previewed last night, the President signed an executive order to begin the process of unwinding Obamacare, paving the way for sweeping changes to health-insurance regulations that would allow an expansion of less-comprehensive health plans.

“We’ve been hearing about the disaster of Obamacare for so long,” Trump said in signing the order at a White House ceremony. “For a long time, I’ve been hearing repeal, replace, repeal, replace.”

He then said that the order is "starting that process" to repeal ObamaCare. It will be the "first steps to providing millions of Americans with ObamaCare relief."

JUST IN: Pres. Trump signs health care executive order, taking his first steps to fulfill vow to dismantle Obamacare https://t.co/QczMLFcWHH pic.twitter.com/UwLbNAVHPA

— CNN International (@cnni) October 12, 2017

The order will direct federal agencies to take actions aimed at providing lower-cost options and fostering competition in the individual insurance markets, according to the Wall Street Journal. The specific steps included in the order will represent only the first moves in his White House’s effort to strike parts of the law, the officials said adding that the order is just the beginning of the administration’s actions related to the health law. Furthermore, it will be months, rather than weeks, for even the most simple changes in the executive order to take effect, and the order leaves key details to the Labor Department, in particular, to determine after a formal rule-making process, including the solicitation of public comment.

While Trump’s order seeks to expand the ability of small businesses and other groups to band together to buy health insurance through what are known as association health plans (AHPs), and also lifts limits on short-term health insurance plans, in some ways the order"s impact remains a mystery as the full extent of the effects will not be immediately clear. The executive order largely does not make changes itself; rather it directs agencies to issue new regulations or guidance. Those new rules will go through a notice and comment period that could take months, officials said.

“The policies outlined in the executive order are the beginning of the actions the administration will take to provide relief to people harmed by Obamacare,” said Andrew Bremberg, director of the administration’s domestic policy council, on a call with reporters earlier Thursday. “You should expect additional actions coming from the administration in months to come.”

Critics however warned that the order could undermine the stability of ObamaCare markets by opening up skimpier, cheaper plans that would divert healthy people away from ObamaCare plans. They also warn that the policies outlined in the order will end up pulling healthier people out of Obamacare’s existing markets, which have strict requirements on what services have to be covered, such as maternity or mental health coverage. The result would be fewer people in the Affordable Care Act’s markets, and the ones who remained could be sicker - driving up premiums, and forcing more people to look elsewhere for coverage.

Democrats warn that the order is part of Trump’s larger plan to “sabotage” the health law and accomplish on his own what Congress could not; democrats have already been crying foul about administration cutbacks to outreach about the coming ObamaCare enrollment period, which begins Nov. 1, including a 90 percent cut to the advertising budget.

"Having failed to repeal the law in Congress, the president is sabotaging the system, using a wrecking ball to singlehandedly rip apart our health care system," Senate Democratic Leader Charles Schumer (N.Y.) said in a statement. "If the system deteriorates, make no mistake about it, the blame will fall squarely on the president"s back," he added.

Which, of course, is convenient for Obama"s signature legacy law, which was already sending premiums soaring over the past few years: now that Trump is doing what he can to undo Obamacare, he will become the scapegoat for everything that was wrong with the law in the first place. The bottom line is simple: if premiums continue rising - which they likely will - it will be Trump"s fault now.

By boosting alternative insurance arrangements that would be exempt from some key ACA rules, the change would provide more options for consumers. But health-insurance experts say it could raise costs for sicker people by drawing healthier, younger consumers to these alternative plans, which could be less expensive and offer fewer benefits.

“It would essentially create a parallel regulatory structure within the individual and small group markets that is freed from the various consumer protections established,” said Spencer Perlman, a policy analyst with Veda Partners, a Bethesda, Maryland-based advisory firm. “The end result could be a death spiral for ACA-compliant plans.”

Which, if the Democrats are right, is precisely what Trump hopes to accomplish.

No matter what the final outcome of Trump"s EO, one thing is clear: at least 12.7 million taxpayers will be happy with the outcome. As Bloomberg reports, according to the Internal Revenue Service, 12.7 million taxpayers claimed a health-care coverage exemption on their tax forms, some because they couldn’t find an affordable plan. Condeluci said people are sitting on the sidelines because the individual market is too costly.

“Now, there might be an option for them,” he said.

Of course, another 12 or so million will be less than excited: about 83% of the 12.2 million people in the Obamacare marketplace receive subsidies, i.e., premium tax credits, to help cover the cost of insurance premiums, according to the Centers for Medicare and Medicaid Services. For those who don’t get subsidies, the coverage can be expensive. The average monthly premium for a family of four with a $60,000 annual income was $1,090, or $13,080 a year for a mid-level “silver” plan, according to a 2016 report from the U.S. Department of Health and Human Services.

House Passes Budget, Jumps First (Smallest) Hurdle Towards Tax Reform

The House passed its 2018 budget resolution Thursday (with 18 Reps voting against) crossing the first threshold toward its goal of sending tax reform legislation to President Trump.

As WaPo reports, the House budget resolution includes major spending cuts demanded by the party"s conservative wing, but the party"s focus is now on passing a tax bill that could add as much as $1.5 trillion to the budget deficit. Special procedures set out in the legislation would ultimately allow Republicans to pass the bill over a potential Democratic filibuster in the Senate.

"Our budget specifically paves the way for pro-growth tax reform that will reduce taxes for middle class Americans and free up American businesses to grow and hire," House Budget Committee Chairman Diane Black (R-Tenn.) said during floor debate.

In a 219-206 vote, The Hill reports lawmakers approved a budget resolution for 2018 that sets up a process for shielding the GOP tax bill from a filibuster in the Senate.

A total of 18 Republicans voted against the resolution, along with all the Democrats, but GOP lawmakers hailed the vote as meaningful because of the tax measure.

“We haven’t reformed this tax system since 1986. We need to pass this budget so we can help bring more jobs, fairer taxes, and bigger paychecks for people across this country,” Speaker Paul Ryan (R-Wis.) said during House floor debate.

Ironically, Democrats lambasted it for the same reason.

“This budget isn’t about conservative policy or reducing the size of our debt and deficits. It’s not even about American families. This budget is about one thing – using budget reconciliation to ram through giant tax giveaways to the wealthy and big corporations - and to do it without bipartisan support,” said Rep. John Yarmuth (D-Ky.), the ranking member of the House Budget Committee.

The Senate is proceeding on a separate track toward passing its own budget, which will have to be reconciled with the House version in the coming weeks.

Yet, as The Hill notes, there are already signs of trouble, with some Republicans questioning whether the tax proposal would add too much to the deficit, and others balking at plans to eliminate a deduction for state and local taxes. The tax plan is now estimated to add $1.5 trillion to the deficit over a decade, but that figure would grow if the state and local tax deduction is not eliminated.

Last Ditch Obamacare Repeal Bill Officially Dead After Collins Says No

Not only was the Republicans" third attempt to repeal Obamacare not lucky, but as of moments ago, said attempt has died a total of three times, the first when John McCain said he would vote no last Friday, then yesterday when Ted Cruz also said he would not support the Graham-Cassidy Obamacare repeal bill, and then the third and final time came late on Monday when Maine Senator Susan Collins confirmed she would oppose the latest GOP effort to repeal and replace ObamaCare, dooming the measure.

"Health care is a deeply personal, complex issue that affects every single one of us and one-sixth of the American economy. Sweeping reforms to our health care system and to Medicaid can’t be done well in a compressed time frame, especially when the actual bill is a moving target," she said in a statement.

Senator Collins opposes Graham-Cassidy health care bills https://t.co/nW6MFUvYVg pic.twitter.com/0DSxDJNMPp

— Sen. Susan Collins (@SenatorCollins) September 25, 2017

Her announcement is hardly a surprise: as we said last week, Collins was widely viewed as a "no" vote but talked with Pence over the weekend and said Sunday she wanted to see the preliminary analysis from the Congressional Budget Office. "It"s very difficult for me to envision a scenario where I would end up voting for this bill," she told CNN"s "State of the Union." Well, just prior to Collins" statement, the CBO projected that the last-ditch GOP ObamaCare repeal bill would result in "millions" of people losing coverage. The agency did not give a specific number given a lack of time to do the analysis before a vote, but said the "direction of the effect is clear." That was enough to seal Collins" "no" answer.

According to Bloomberg, Collins joins Republican Sens. Rand Paul and John McCain, who have already come out against bill, although technically on Sunday Ted Cruz said that “Right now, they don’t have my vote and I don"t think they have Mike Lee’s vote either,” which means that the third and final attempt to repeal Obamacare was not even down to the wire.

Collins"s announcement came as Graham, Cassidy and the White House engaged in a dash of last minute negotiations to try to keep their ObamaCare repeal push alive and win over holdouts, including Collins. “If there’s a billion more going to Maine ... that’s a heck of a lot,” Cassidy told The Washington Post. "It’s not for Susan, it’s for the Mainers. But she cares so passionately about those Mainers, I’m hoping those extra dollars going to her state ... would make a difference to her.”

According to The Hill, it isn"t immediately clear whether leadership will force a vote even though they are short of necessary support to pass a bill. "I"m in a fact-gathering mode," Sen. John Cornyn (R-Texas), the No. 2 Senate Republican, told reporters earlier Monday.

A spokesman for Majority Leader Mitch McConnell (R-Ky.) said last week that it was his "intention" to bring up Graham-Cassidy but he didn"t mention a potential vote in his opening remarks on Monday. Rank-and-file members have also expressed skepticism that they would ultimately have a vote.

And now onto Trump"s tax reform, which despite Wall Street"s recent spike in enthusiasm will likely suffer the same fate as Obamacare repeal.

Obamacare Repeal Officially Dead After Cruz Says No

In a sudden change of heart that kills senate Republicans’ effort to pass a bill to repeal and replace Obamacare before a rule allowing Republicans to circumvent a Democratic filibuster expires at the end of the month, Texas Sen. Ted Cruz is now saying he won’t support the Graham-Cassidy Obamacare repeal bill.

Cruz, who revealed his position during a panel discussion at a Texas Tribune conference in Austin, suggested that the proposal also lacks the vote of Sen. Mike Lee, according to Politico. The Texas Republican said he and Lee offered amendments to the Graham-Cassidy proposal last week that would go further in bringing down Obamacare premiums but that the changes weren’t included in the latest draft of the bill.

The latest blow to the seven-year-long Obamacare repeal effort comes as President Donald Trump escalates feuds with Both North Korea and US professional sports leagues. Cruz’s opposition means that, with both he and McCain saying know and at least two other moderates leaning toward a no, that even if Trump manages to flip Sen. Rand Paul, he wouldn’t be able to muster the 50 votes needed for Vice President Mike Pence to break a tie.

“Right now, they don’t have my vote and I don"t think they have Mike Lee’s vote either,” Cruz said during a panel discussion at the Texas Tribune festival in Austin that also included Sen. John Cornyn.

Both Cruz and Cornyn – a member of senate Republican leadership - had said they back the way the bill would convert Obamacare funding into a system of block grants to states. But while Cornyn said he would vote for the bill as it stands, Cruz said that he wants to see more changes, but declined to elaborate.

Ironically, Texas and other states that didn"t expand coverage under Obamacare would fare well under the Graham-Cassidy plan, according to Politico, which cited an independent analyses of the bill showing it would save the state some $35 billion between 2020 and 2026.

Rand Paul reiterated his opposition to the bill during an appearance on “Meet the Press” Sunday morning, saying he would only support the bill if the block-grant provision that Cruz purportedly supports (or at least, once supported) is dropped.

"What it sets up is a perpetual food fight over the formula," he said. "What happens when Democrats win? They"re going to claw back that money from Republican states to give to Democrat states."

Trump had said during a rally on Friday that Paul might “come around” then tweeted Saturday that he might’ve found a way to gain the Kentucky Republican’s support. News of Cruz’s opposition must’ve pleased the dozens of protesters who gathered outside the University of Texas auditorium where Cruz was speaking to protest repealing the bill.
 

* * *

Here"s a roundup of where key senators stand on Graham-Cassidy. As it suggests, the bill now has a very low chance of passing.

Where GOP stands on Graham-Cassidy

Murkowski: ????
Portman: ????
Collins: ????
Capito: ????

McCain: ?
Cruz: ?
Paul: ?

3 GOPers saying ? stops bill.

— Dan Diamond (@ddiamond) September 24, 2017

John McCain Kills GOP's Last Ditch Effort To Repeal Obamacare

Third time turned out to be unlucky after all.

Earlier today, Sen. Susan Collins said that she has serious concerns about the latest GOP bill to repeal and replace ObamaCare as Republicans prepare to vote on the legislation next week, adding that she was "leaning against the bill... I’m just trying to do what I believe is the right thing for the people of Maine."  And with Collins voicing against the bill, it meant that GOP leadership would be left with no room for error if they want to get their last-ditch ObamaCare repeal bill through the Senate next week.

The math is simple: Republicans have 52 seats and need 50 senators to support the bill, which would require Vice President Pence to break a tie, under the special budget rules being used to avoid a Democratic filibuster.  Sen. Rand Paul has already said he will vote against the legislation.

Which meant that losing just one more vote would mean the end of this latest attempt to repeal Obamacare.

They lost it moments ago when John McCain said in a statement that "I cannot in good conscience vote for the Graham-Cassidy proposal"

I cannot in good conscience vote for Graham-Cassidy. A bill impacting so many lives deserves a bipartisan approach. https://t.co/2sDjhw6Era pic.twitter.com/30OWezQpLg

— John McCain (@SenJohnMcCain) September 22, 2017

The senator added that "I would consider supporting legislation similar to that offered by my friends Senators Graham and Cassidy were it the product of extensive hearings, debate and amendment. But that has not been the case. Instead, the specter of September 30th budget reconciliation deadline has hung over this entire process. McCain"s statement recalls his dramatic return to Washington in July after a brain-cancer diagnosis, when he cast the decisive “no” vote to send a health plan by Senate Majority Leader Mitch McConnell down to a stunning 49-51 defeat.

Ultimately, McCain demands the Democrats be part of any solution: "A bill of this impact requires a bipartisan approach" as "we should not be content to pass health care legislation on a party-line basis, as Democrats did when they rammed Obamacare through Congress in 2009."

His full statement below:

STATEMENT BY SENATOR JOHN McCAIN ON HEALTH CARE REFORM

Washington, D.C. — U.S. Senator John McCain (R-AZ) released the following statement today on health care reform:

"As I have repeatedly stressed, health care reform legislation ought to be the product of regular order in the Senate. Committees of jurisdiction should mark up legislation with input from all committee members, and send their bill to the floor for debate and amendment. That is the only way we might achieve bipartisan consensus on lasting reform, without which a policy that affects one-fifth of our economy and every single American family will be subject to reversal with every change of administration and congressional majority.

"I would consider supporting legislation similar to that offered by my friends Senators Graham and Cassidy were it the product of extensive hearings, debate and amendment. But that has not been the case. Instead, the specter of September 30th budget reconciliation deadline has hung over this entire process.

"We should not be content to pass health care legislation on a party-line basis, as Democrats did when they rammed Obamacare through Congress in 2009. If we do so, our success could be as short-lived as theirs when the political winds shift, as they regularly do. The issue is too important, and too many lives are at risk, for us to leave the American people guessing from one election to the next whether and how they will acquire health insurance. A bill of this impact requires a bipartisan approach.

"Senators Alexander and Murray have been negotiating in good faith to fix some of the problems with Obamacare. But I fear that the prospect of one last attempt at a strictly Republican bill has left the impression that their efforts cannot succeed. I hope they will resume their work should this last attempt at a partisan solution fail.

"1 cannot in good conscience vote for the Graham-Cassidy proposal. I believe we could do better working together, Republicans and Democrats, and have not yet really tried. Nor could I support it without knowing how much it will cost, how it will effect insurance premiums, and how many people will be helped or hurt by it. Without a full CB0 score, which won"t be available by the end of the month, we won"t have reliable answers to any of those questions.

"I take no pleasure in announcing my opposition. Far from it. The bill"s authors are my dear friends, and I think the world of them. I know they are acting consistently with their beliefs and sense of what is best for the country. So am I.

"I hope that in the months ahead, we can join with colleagues on both sides of the aisle to arrive at a compromise solution that is acceptable to most of us, and serves the interests of Americans as best we can."

In response to McCain"s statement, Lindsey Graham, one of the bill"s sponsors, tweeted "My friendship with @SenJohnMcCain is not based on how he votes but respect for how he’s lived his life and the person he is", however he added that "I respectfully disagree with @SenJohnMcCain position not to proceed forward on Graham-Cassidy-Heller-Johnson" and that "I know Graham-Cassidy-Heller-Johnson is the best chance to repeal and replace Obamacare."

My friendship with @SenJohnMcCain is not based on how he votes but respect for how he’s lived his life and the person he is.

— Lindsey Graham (@LindseyGrahamSC) September 22, 2017

* * *

Earlier on Friday, the Brookings Institution estimated Friday that the Graham-Cassidy plan would reduce the number of people with health coverage by about 21 million a year from 2020 through 2026. The number may be larger, it said, because of difficulties in setting up state health systems by 2020 and possible market turmoil in the final years. "What is clear, however, is that the legislation would result in very large reductions in insurance coverage," Brookings said. The Center on Budget and Policy Priorities said Medicaid funding cuts would equal 16 percent of projected state budgets in 2027. "That’s more than what states provide for higher education," it said according to Bloomberg.

McConnell said earlier this week that he intended to hold a Senate vote next week before a Sept. 30 deadline to use a fast-track procedure allowing a simple majority vote. David Popp, a spokesman for McConnell, didn’t immediately respond to a request for comment about McCain’s decision.

President Donald Trump warned on Twitter on Friday, “Rand Paul, or whoever votes against Hcare Bill, will forever (future political campaigns) be known as ‘the Republican who saved ObamaCare.’” The president is working the phone on the issue and is “open to having face-to-face meetings,” adviser Kellyanne Conway said on Fox News. “The president is leaning in all the way.”

Meanwhile, Democrats denounced the lightning-speed path to a vote, with only one committee hearing on the bill scheduled. Senate Minority Leader Chuck Schumer of New York said the “dead of night” bill’s spending cuts will cause millions of Americans to lose insurance coverage and burden the finances of his state and many others.

The new proposal would turn Obamacare funds into block grants for the states, which would create their own health-care plans for their residents. States that expanded Medicaid under Obamacare would be hardest hit by spending cuts, losing $180 billion from 2020 to 2026, according to the Kaiser Family Foundation. States that rejected the Medicaid expansion would gain $73 billion.

The measure would end the Affordable Care Act’s requirements that individuals have insurance and that most employers provide it.

And with the GOP"s final attempt to pass Obamacare repeal before the end of the month now likely history, the market sighed a collective breath of relief, sending the managed care index soaring as the status quo is now assured to remain indefinitely.

And now we await Donald Trump"s latest angry tweet.

Angry Rand Paul Strikes Back: "I Won't Be Bribed Or Bullied" On Obamacare Repeal Bill

Throughout the week President Trump has taken repeated shots at Senator Rand Paul for his continued resistance to the so-called Graham-Cassidy Obamacare repeal bill.  Among other things, Trump defined Paul as a "negative force when it comes to fixing healthcare" and said that he would forever by remembered as "the Republican who saved ObamaCare."

"Rand Paul is a friend of mine but he is such a negative force when it comes to fixing healthcare. Graham-Cassidy Bill is GREAT! Ends Ocare!"

"Rand Paul, or whoever votes against Hcare Bill, will forever (future political campaigns) be known as "the Republican who saved ObamaCare.""

Rand Paul is a friend of mine but he is such a negative force when it comes to fixing healthcare. Graham-Cassidy Bill is GREAT! Ends Ocare!

— Donald J. Trump (@realDonaldTrump) September 20, 2017

Rand Paul, or whoever votes against Hcare Bill, will forever (future political campaigns) be known as "the Republican who saved ObamaCare."

— Donald J. Trump (@realDonaldTrump) September 22, 2017

But it seems as though Trump"s latest attack this morning struck a nerve with Senator Paul as he has fired back with a tweet storm of his own saying that it"s disingenuous to call "a bill that KEEPS most of Obamacare" a "repeal" bill before concluding that he will not be "bribed or bullied" by the President"s twitter feed.

"No one is more opposed to Obamacare than I am, and I"ve voted multiple times for repeal.  The current bill isn"t repeal."

"I won"t vote for Obamacare Lite that keeps 90% of the taxes & spending just so some people can claim credit for something that didn"t happen."

"Calling a bill that KEEPS most of Obamacare "repeal" doesn"t make it true. That"s what the swamp does. I won"t be bribed or bullied."

No one is more opposed to Obamacare than I am, and I"ve voted multiple times for repeal. The current bill isn"t repeal.

— Senator Rand Paul (@RandPaul) September 22, 2017

Calling a bill that KEEPS most of Obamacare "repeal" doesn"t make it true. That"s what the swamp does. I won"t be bribed or bullied.

— Senator Rand Paul (@RandPaul) September 22, 2017

Of course, while the Graham-Cassidy bill continues to flood headlines, it was all but killed earlier this afternoon when Senator John McCain announced that he "cannot in good conscience vote for Graham-Cassidy."

I cannot in good conscience vote for Graham-Cassidy. A bill impacting so many lives deserves a bipartisan approach. https://t.co/2sDjhw6Era pic.twitter.com/30OWezQpLg

— John McCain (@SenJohnMcCain) September 22, 2017

Meanwhile, with Lisa Murkowski (R-AK), Susan Collins (R-ME) and Mike Lee (R-UT), among others, still saying they"re on the fence, The Hill pointed out that Senators Graham and Cassidy have gone "into overdrive" to design "special accommodations" to win over holdouts.

Graham told a meeting of conservative activists last week that special accommodations would have to be made in the bill for Alaska to win over Murkowski. The senator asked the groups to understand, and to not make a stink if concessions were made.

The Graham-Cassidy proposal would convert ObamaCare’s subsidies and funds for Medicaid expansion into block grants that would be given to states to design their own programs.

Right now it looks like an uphill battle to change Murkowski’s mind.

“I’d say the chances are less than 30 percent. Alaska doesn’t do very well in this bill. Her governor is lukewarm on it and her insurance commissioner is not for it,” one Senate GOP aide added.

Graham on Wednesday downplayed the notion that Alaska would fare better than other states in the bill but nevertheless acknowledged that something would have to be done to accommodate the state’s high costs.

“What we’re going to do is not deny Alaska the uniqueness of Alaska, but that’s it,” he said, according to The Washington Post.

So, while Lindsey Graham seems to still be optimistic...

I’m excited about solutions we have found in Graham-Cassidy-Heller-Johnson. We press on.

— Lindsey Graham (@LindseyGrahamSC) September 22, 2017

...all signs indicate that "Obamacare Repeal 3.0" has once again been nothing but a colossal waste of time.

Two Charts Prove Obamacare Is Not "Stabilizing" In 2018

As the Obamacare repeal and replace effort raged on in Congress over the past six months, several Democrats and even some of the original Obamacare architects stepped forward to argue that the crippling premium increases from 2014 through 2017 were just a 1x market adjustment and that everything would miraculously "stabilize" in 2018.

Well, according to data from the Kaiser Family Foundation, that prediction isn"t playing out exactly as expected.  Taking a look at 21 of the bigger healthcare markets in the United States, Kaiser found that premiums submitted so far for 2018 are increasing at an average rate of 17% YoY and ranging up to 49% in Wilmington. 

Now, we understand that the term "stabilizing" is somewhat subjective but we"re not sure that rates spiking at 10.5x prevailing inflation rates, on average, would reasonably fit anyone"s definition.

 

Meanwhile the 4-year rate increases from 2014 to 2018 are even more staggering...

 

And while Democrats continue to boast about overall Obamacare enrollments, the "off-exchange market" (i.e. people who make too much money to quality for subsidies and whose premiums are required to subsidize everyone else who does qualify) contracted by 2.1mm in 2016, or a 29% drop.  With those kind of declines, it"s only a matter of time until there are no more "rich" fools in the pool willing to continue subsidizing a broken system. More from the National Review:

Also, MFA published the same report in 2016, facilitating a year-over-year comparison. The on-exchange market fell from 12,681,874 to 12,216,003 individuals, a reduction of 465,871 or 4 percent. However, the off-exchange market fell from 7,520,939 to 5,361,451, a reduction of 2,159,488 or 29 percent. In other words, enrollment is steady among those who receive subsidies but declining dramatically among those who do not.

 

Much has been made of the question of whether the individual markets are in a “death spiral.” Given that the on-exchange market enrollment is relatively stable, there is clearly not a death spiral in the subsidized market. However, with a reduction in the unsubsidized market of 29 percent in just one year, that pattern certainly looks like one we would expect in a market spiraling down.

Of course, it"s all Trump"s fault now...

Senate Releases Full Text Of "Skinny" Obamacare Repeal Bill, Vote Expected After Midnight

With the Senate healthcare vote expected sometime between midnight and 2am, moments ago the full text of the Senate "Skinny" bill which may or may not pass, has been released. Here is the summary version of what is hereby known as the "The Health Care Freedom Act":

• REPEAL THE INDIVIDUAL MANDATE — Obamacare"s individual mandate forced the American people to purchase insurance they frequently didn"t want, couldn"t afford or actually use. This plan permanently protects Americans from this onerous mandate.


• REPEAL THE EMPLOYER MANDATE — Obamacare"s employer mandate too often forced job creators to forgo hiring new workers or keep an employee"s hours low. This anti-jobs mandate is repealed for eight years, which provides employers a greater incentive to hire more employees.


• PROVIDE FLEXIBILITY TO STATES (1332 WAIVERS)— States can access additional flexibility to use waivers that exist in current law to provide more options for consumers to buy the health insurance they want. It also allows the Department of Health and Human Services to approve waivers faster.


• INCREASE HSA CONTRIBUTIONS — Increase contribution limits to tax-free Health Savings Accounts for three years to help pay for out-of-pocket health costs and expensive prescription medications.


• REPEAL THE MEDICAL DEVICE TAX — Both Democrats and Republicans have opposed this tax on medical innovation. The legislation repeals this tax for three years.


• FUND COMMUNITY HEALTH CENTERS — Prioritize health funding for Community Health Centers across the country.

The full bill also includes a provision for defunding Planned Parenthood, which is the reason for the community health center language.

As the NYT reports, after three days of debate, Republican leaders had little to show for it and were struggling to devise even a stripped-down plan on which at least 50 of the 52 Senate Republicans could agree. The Senate majority leader, Mitch McConnell of Kentucky, was doing whatever he could to secure votes and win Senate approval on Friday for a bill that would repeal at least a few provisions of the Affordable Care Act. That raised the spectacle of senators pressed by their leaders to vote on legislation that some of them despise, with a promise that a “yes” would not really be approval, just a vote to start House-Senate negotiations on something better.

Senators Lindsey Graham South Carolina, John McCain of Arizona and Ron Johnson of Wisconsin, all Republicans, simply demanded ironclad assurances from House leaders that the bill would not be enacted.

“I’m not going to vote for a bill that is terrible policy and horrible politics just because we have to get something done,” Mr. Graham said, calling the stripped-down bill a “disaster” and a “fraud” as a replacement for the health law.

Five GOP senators,  Sens. Lindsey Graham (S.C.), David Perdue (Ga.), Ron Johnson (Wis.), Mike Rounds (S.D.) and Ted Cruz (Texas), spoke with Ryan via phone in Sen. John Cornyn"s leadership office outside of the Senate floor. 

"Yes, he said, listen why would we want to own a bill that increases premiums and doesn"t fix ObamaCare — that"s all I wanted to hear from him," Graham told reporters when asked if Ryan guaranteed the House wouldn"t pass a paired down Senate repeal bill.

Pressed if he would vote "yes" on the Senate GOP healthcare bill after his conversation with Ryan, Graham said he would. Johnson added that "of course" the talk with Ryan was enough to assuage his concerns.  "We just wanted to hear it right from Paul. ... We got that assurance. He said we could tell you — this is going to go to conference," the conservative GOP senator said.

Johnson added that any bill that passes the Senate "will not pass the House. This will go to conference. ... That"s what we got." Johnson and Graham, as well as GOP Sens. Bill Cassidy (La.) and John McCain (Ariz.),  warned earlier Thursday that they could not support moving forward with a "skinny" repeal bill until they got a guarantee that the House would not leapfrog a conference with Senate and pass the bill.

Paul issued a statement saying the House was "willing" to go to conference on the healthcare bills, but that it was up to Senate Republicans to first show they could pass a bill. 

McCain told reporters while heading into the Senate chamber for a pair of votes that Ryan"s statement wasn"t sufficient. He then appeared to walk that back slightly, telling Bloomberg that he declined to say how he would vote, saying he wanted to talk to his state"s governor.

Earlier, Sen, Shelley Moore Capito told reporters while leaving the GOP caucus room that she "didn"t know how to interpret" Ryan"s statement.

Senate Majority Leader Mitch McConnell (R-Ky.) will need 50 of 52 GOP senators to support the "skinny" repeal proposal, which he unveiled on the Senate floor on Thursday night

Some further observations on the bill from Politico"s Burgess Everett (via Twitter):

• McConnell says the bill "restores freedom to Americans, that Obamacare took away."


• McConnell is selling the skinny bill as good policy and also as a path to conference.


• This bill was not designed for Collins and Murkowski, so GOP looking for everyone that voted to open debate to support the skinny bill.


• Murphy: "This is nuclear grade bonkers what is happening here"

Some more from NBC"s Frank Thorp (via Twitter):

• Sen Rounds on mtg with @SpeakerRyan: "He acknowledged that this particular bill was designed to get us to conference..."


• More Rounds: "(@SpeakerRyan) said we will bring it to conference. And we asked, can we say that publicly, and he said, yes."


• Sen Rounds: "(Speaker Ryan) has given us about as good of an assurance as you can get that he intends to send this to conference."


• The vote series including the vote on the "skinny repeal" bill is expected to happen around midnight tonight.

Having been written off earlier, it increasingly looks as if the bill may just have enough support to pass, with the tie-breaking vote from Mike Pence who is expected to be present for a potential vote later.

The full text of the pared-down "skinny bill" is below (link):