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

              

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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.
 

Stocks Tumble On News Senate Tax Plan To Delay Corporate Tax Cut Until 2019

Confirming reports from earlier this week that the Senate GOP tax plan would delay the corporate tax cut for (at least) one year, a move that would strip the proposed tax reform of its most potent benefit, moments ago the Wapo reported that in a few hours, Senate Republicans will propose delaying a cut in the corporate tax rate from 35 percent to 20 percent until 2019. Bloomberg confirmed the news, quoting Bill Cassidy who said in an interview that that Senate Finance Committee tax legislation proposal will include a one-year delay before cutting the corporate tax rate to 20%.

The compromise would be a major departure from President Trump’s insistence on immediate changes that he says "are necessary to spur the economy." And while some Senate Republicans objected to the one year delay, they were overruled.

As Bloomberg adds, the Senate tax writers will also propose keeping number of individual income-tax brackets at seven in a departure from the House bill that condenses the number to four, Sen. Bill Cassidy tells reporters. Cassidy also says Senate proposal won’t keep top rate at 39.6%, though doesn’t state what new top individual rate would be

In an attempt to offset the delayed economic boost from excess corporate spending, the WaPo explains that to prevent companies from waiting until 2019 to invest, "Senate Republicans will propose to allow companies to immediately deduct all capital investments in 2018 to incentivize them to spend more money immediately, the people said."

The reason for the delay is simple: there is not enough revenue. "The one-year delay would lower the cost of the tax cut bill by more than $100 billion, and negotiators are trying to preserve as much revenue as they can for other changes." The revision could also delay decisions by companies to move back to the United States from overseas or have companies hold off on other decisions as they wait for the corporate rate to fall.

As we have explained previously, the Senate approach is different than House Republicans are taking as it is limited by practical considerations: while the House is advancing a bill that would lower the corporate tax rate in 2018, they are also having problems dealing with the total cost of their bill, which has ballooned beyond the $1.5 trillion price tag they were permitted under budget rules.

And while Treasury Secretary Steven Mnuchin told Bloomberg yesterday that the White House’s “strong preference” would be for the tax cut to go into effect next year, the White House is not expected to threaten blocking the bill over this change.

In other words, despite the various teasers how the 1 year delay is immaterial, the biggest boost to the economy from the Senate"s tax bill is about to be eliminated. The result was immediate, with stocks dumping and the VIX spiking.

"Incompetent, Clueless" Corker Slams "Utterly Untruthful President" Trump Ahead Of Party-Unity Meeting

Update (11:50 am ET): With just one hour remaining until Trump"s lunch meeting with Republican Senators on the Hill, Senator Bob Corker is apparently not yet ready to tone down his feud with President Trump having just told CNN that Trump will be most remembered for "the debasement of our country" after he leaves office.

Corker just now: "The President has great difficulty with the truth on many issues." https://t.co/GnPoByj9IL

— Meg Wagner (@megwagner) October 24, 2017

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Update (10:30 am ET): With just hours to go before Trump"s lunchtime meeting with Congressional Republicans, the president is heaping still more twitter scorn on one of his biggest perceived foes, Tennessee Senator and Senate Foreign Relations Committee Chairman Bob Corker.

This time, he"s focusing on Corker"s foreign-policy work. The president previously criticized Corker for helping create the Iran deal.

Sen. Corker is the incompetent head of the Foreign Relations Committee, & look how poorly the U.S. has done. He doesn"t have a clue as.....

— Donald J. Trump (@realDonaldTrump) October 24, 2017

...the entire World WAS laughing and taking advantage of us. People like liddle" Bob Corker have set the U.S. way back. Now we move forward!

— Donald J. Trump (@realDonaldTrump) October 24, 2017

Corker was quick to respond himself - repeating his "Adult Day Care" jab...

Same untruths from an utterly untruthful president. #AlertTheDaycareStaff

— Senator Bob Corker (@SenBobCorker) October 24, 2017

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At 1pm EST President Trump is heading to Capitol Hill to huddle with Senate Republicans in hopes that he can somehow mend fences with certain members of his own party and save his tax plan from meeting the same fate as his Obamacare repeal efforts. That said, he seems to be off to a bad start on the whole "fence mending thing" so far this morning after trashing Senator Corker in an early-morning tweet storm:

"Bob Corker, who helped President O give us the bad Iran Deal & couldn"t get elected dog catcher in Tennessee, is now fighting Tax Cuts.  Corker dropped out of the race in Tennesse when I refused to endorse him, and now is only negative on anything Trump. Look at his record!"

 

"Isn"t it sad that lightweight Senator Bob Corker, who couldn"t get re-elected in the Great State of Tennessee, will now fight Tax Cuts plus!"

Bob Corker, who helped President O give us the bad Iran Deal & couldn"t get elected dog catcher in Tennessee, is now fighting Tax Cuts....

— Donald J. Trump (@realDonaldTrump) October 24, 2017

...Corker dropped out of the race in Tennesse when I refused to endorse him, and now is only negative on anything Trump. Look at his record!

— Donald J. Trump (@realDonaldTrump) October 24, 2017

Isn"t it sad that lightweight Senator Bob Corker, who couldn"t get re-elected in the Great State of Tennessee, will now fight Tax Cuts plus!

— Donald J. Trump (@realDonaldTrump) October 24, 2017

Of course, the tweet storm followed an appearance by Senator Corker on "Good Morning America" this morning in which he attacked the President on his handling of foreign policy initiatives and stood by his previous comments that the White House has turned into an "adult day care center."

Republican Sen. Bob Corker today stood by his remarks criticizing the White House as an "adult day care center" and arguing that President Trump is putting the United States on a path toward "World War III."

 

"I don’t make comments I haven’t thought about," the Tennessee senator said in an interview with "Good Morning America."

 

Corker was an early Trump ally, endorsing him during the presidential campaign. But Corker has since been wary of how Trump is handling the presidency and, in particular, his treatment of Secretary of State Rex Tillerson.

 

“When you look at the fact that we"ve got this issue in North Korea and the president continues to kneecap his diplomatic representative, the secretary of state, and really move him away from successful diplomatic negotiations with China, which is key to this, you"re taking us on a path to combat,” Corker told "Good Morning America" today.

 

He added that when it comes to the diplomatic efforts underway to manage the rising tensions with North Korea, he would like for Trump to “leave it to the professionals for a while.”

 

“The president undermines our secretary of state [and] raises tensions in the area by virtue of the tweets that he sends out,” Corker said.

Of course, as The Hill points out, Trump"s feud with Corker is just the latest of long series of social media spats with Republicans that have ranged from John McCain to Mitch McConnell and Jeff Flake.

Two senators who have ratcheted up their rhetoric against Trump in recent weeks, Sens. John McCain (R-Ariz.) and Bob Corker (R-Tenn.), are likely to be in the room.

 

Corker recently compared the White House to an “adult day care center,” while McCain over the weekend criticized wealthy people who avoided the Vietnam War because “they had a bone spur.” Trump was granted one of his five deferments from the war because of a bone spur; McCain late Monday denied that the remark was aimed at the president.

 

In August, Trump repeatedly blasted McConnell for failing to deliver legislation to repeal and replace ObamaCare. At one point, he suggested McConnell should step aside if he couldn’t deliver.

 

Trump’s criticism of the Senate leader threatens to become a full-fledged revolt in next year’s elections, when Trump’s former adviser, Stephen Bannon, hopes to support candidates who can defeat members of the GOP establishment.

 

The president has already signaled his desire to oust Flake, a longtime critic he once called “toxic.” Trump encouraged a conservative former state legislator, Kelli Ward, to challenge Flake in next year’s primary.

That said, GOP Senators warn that Trump will have to set aside his feuds and put the full weight of his office behind tax reform if it"s to have any chance of passing.

“We’re certainly looking for the president to put the full force and power into helping put through a good tax reform bill,” said Senate Finance Committee Chairman Orrin Hatch (R-Utah).

 

While Trump was dogged in his pursuit of ObamaCare repeal, he did not seize the bully pulpit by traveling around the country to give speeches on the party’s health-care plan.

 

Hatch said Trump should sell tax reform every chance he gets.

 

“It’s always an issue. No matter what you do, you never say enough about it,” Hatch observed about some of his colleagues’ grumbling during the health-care debate.

 

Trump has shown he has learned his lessons from the ObamaCare debate. He has already put in more legwork selling his tax plan to the public and fellow Republicans on Capitol Hill.

 

The president joined a conference call on Sunday afternoon with House Republicans, urging them to immediately pass the Senate-approved budget resolution and get to work on tax reform.

Of course, part of the problem with crafting the right messaging on tax reform is no one has any idea what will ultimately end up in the bill.  With just a few weeks left until the bill was supposed to be passed through the House, Republicans still haven"t set income brackets, are waffling on how to treat state and local tax deductions and have apparently even debated lowering contribution limits for 401(k) plans.

Inconsistent communication from the White House about how its tax plan would work and who would benefit risks undermining Trump’s campaign to build public support for his signature initiative. It also leaves lawmakers guessing about what the president wants -- or at least is willing to accept -- as Congress fills in the broad tax framework Trump and GOP leaders released last month.

 

Even Senate Finance Chairman Orrin Hatch, whose panel is responsible for drafting tax legislation, said in an interview Monday that he wasn’t certain of Trump’s red lines -- hours after the president shot down in a Twitter post a Republican idea to reduce annual limits on 401(k) retirement account contributions.

 

“We need to know what the president wants to do to try to coordinate it with him,” he said. “So far I’m not quite sure where he’s going.”

 

Republicans have vacillated on how to treat state-and-local taxes and whether to add a higher tax bracket for top earners. Administration officials have made several conflicting statements about the effect on the deficit, ranging from predictions of debt-reducing growth to revenue neutrality to active advocacy for more debt.

 

“It’s a gong show,” said David Stockman, who served as budget director when President Ronald Reagan passed tax cuts in the 1980s. Stockman blamed “naïve cowboys” in the administration with scant Washington experience for the lack of message discipline.

We eagerly await Trump"s live tweets during the meeting.

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.

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.

Why Obamacare Repeal Failed

Authored by Taylor Lewis via Mises Canada blog,

"Farewell the plumed troop and the big wars

That make ambition virtue! O, farewell!” – Othello

Republicans lost, big league. On the one solid promise they’ve repeated ad nauseam for seven years and running, the party of Reagan came up short.

The Affordable Care Act, otherwise known as Obamacare, is here to stay. Congressional Republicans, despite a million vows to the contrary, failed to repeal it. Disagreement within the ranks proved too much; members couldn’t find a way to reconcile their rhetoric with practice.

Ironically enough, the man who gave a brief flicker of hope to Obamacare opponents was the same who snuffed it out: Senator John McCain.

Recently diagnosed with glioblastoma, McCain returned to Washington in time to vote for the motion to proceed with debate on a possible repeal package. In the wee hours of Friday morning, he cast the deciding “nay” vote on what was marketed as “skinny repeal,” an amendment to abolish some of the worst parts of Obamacare, including the individual mandate.

Just like that, McCain went from Senate savior to Judas Iscariot. In a press statement, the Arizona senator expressed concern that, despite Speaker of the House Paul Ryan’s assurances, the amendment would be immediately passed by the House and sent to President Trump’s desk. McCain was far from the only senator to voice reserve over this prospect.

McCain’s objection gets to the absurdity of the whole repeal effort: Republicans, failing to pass out an outright Obamacare repeal, were willing to pass a bill they openly hoped would not become law, but would only go to conference with the House and emerge as new legislation entirely.

The McCain gambit demonstrated just how out of sync the Republican strategy on reforming health care is. It was so bad that Politico copy-editors wrote the headline “Senate Republicans hope their own Obamacare repeal won’t become law” and weren’t inaccurate. The desperation to pass something, anything, is lawmaking at its most juvenile.

As one Twitter observer put it, “McCain voted NO so other GOP Sens who shared his view could vote YES last night to let them save face w/conservative base voters.” I can’t think of a more apt description.

The Republicans’ failure of vision and action leaves Obamacare the little law that could. Through multiple court challenges, numerous elections, and a totally united opposition government threatening to extirpate it for good, President Obama’s crowning achievement remains.

Now, every American who cast a GOP ballot in the hopes of de-socializing health care is shaking their head at this shameful acquiescence. Republicans deserve their scorn, but those casting blame are not entirely innocent. Culpability rests on both sides of the aisle: Voters should have never expected a clean and easy slicing away at an entitlement program. And, more so, GOP candidates should have never portrayed the effort as a cinch.

But even while entitlements may be a dependency-causing drug, Republicans still managed to squander what was a stars-aligned opportunity. Coming away from November with full control of Congress and the White House created an imperative to act. Premiums have steadily increased under Obamacare since its inception. The government-run exchanges are a mess, with insurers abandoning them faster than the Titanic. Iowa only has one insurer, Medica, operating on the state exchange. States like Arizona (McCain’s home state!) only have a few insurers. An analysis from the Kaiser Family Foundation finds that by the end of 2017, one third of U.S. counties will have only one insurer.

Price and availability statistics provide ample reason for reform. But Republicans were helped by something more: A prime example of the dangers of government-administered health care. The heart-wrenching case of little Charlie Gard made world headlines by putting the cruelty of Britain’s National Health Service on full display. Charlie was diagnosed with encephalomyopathic mitochondrial DNA depletion syndrome, which left him unable to breathe on his own while slowly destroying his organs. Gard’s parents wanted to seek experimental treatment in America, but the hospital refused to release their child.

Charlie was taken off life support the day of the failed Obamacare repeal vote, drawing his last breath shortly after. At the end, the hospital even denied the parents’ request to take Charlie home so he could live his last few moments away from the sterile ward walls.

While propriety says children shouldn’t be political props, the Gard story was impossible to escape. And even with its sad ending as a backdrop, Republicans still couldn’t muster the will to undo America’s largest entitlement program since Medicare.

Conservative commentators are at a loss to explain how Republicans could bungle such a huge opportunity. The answer, though, is easy, but it’s not an easy one to face for those who derive an income from drafting talking points.

Many of Obamacare’s main aspects were Republican-devised and first implemented by a Republican governor. As Matthew Walther writes, Obamacare is, at its heart, a “plan devised by the Heritage Foundation in the ’90s that is messy but not ipso facto unacceptable. The only problem is that it was passed by a guy with a D behind his name.”

Republicans were never going to repeal a Republican health care plan. For all their talk of free-markets, the last thing any GOP politicians will do is support an entirely unfettered marketplace in any service. Like it or not, Obamacare is a midway point between wholly private enterprise and a single-payer, government-run health care system.

Does this failure mean the Republican Party is finished? Surely, seven years of a failed promise will spell doom at the ballot box, right?

Hardly. A new Gallup poll shows that, for the first time ever, Obamacare has majority support from Americans. In a revealing New York Times dispatch from Doylestown, Pennsylvania, rural Trump-backers have come to terms with Obamacare. “As much as I was against it,” said one fiscally conservative voter, “at this point I’m against the repeal.” One restaurant owner commented, “I can’t even remember why I opposed it.”

Come 2018, it’s hard to see amnesia’s muddying effect dissipating.

Can Republicans Actually Pull It Off: Senate GOP Consdering "Scaled-Down" Healthcare Bill

While ahead of today"s Senate healthcare vote it was nothing but noise and chaos, gradually things are crystallizing, and there is a small chance Senate Republicans may just be able to pull it off.

According to GOP aides quoted by The Hill, Senate Republicans are considering passing a dramatically scaled-down version of their ObamaCare repeal bill as a way to pass something and set up negotiations with the House. The "skinny bill" proposal is intended to be something all Republicans can agree on, allowing something to pass and setting up a conference committee with the House.

As The Hill adds, the scaled-down bill would likely just repeal ObamaCare"s individual and employer mandates and the medical device tax and represents a far narrower measure than the most recent Senate replacement bill, which also scaled down ObamaCare"s subsidies and cut Medicaid.

The consideration of the scaled down measure is a sign of how much trouble Senate Republicans are having coming to agreement on any more significant bill.

The scaled-down bill will likely be revealed after the initial two votes on both a repeal-only measure and the latest replacement bill, fail as expected. Republicans also will need to gather enough votes to start debate, and it is still unclear if they have those votes. Still, John Cornyn, the No. 2 Senate Republican, was optimistic when he floated a conference committee with the House on Monday evening. “I think if you want to get a result that may be a selling point."

And in a sign that things may be starting to move in Trump"s favor, ealier today Sen. Rand Paul said Tuesday that he will vote in favor of the Senate healthcare.  Paul tweeted that he will vote in favor of a motion to proceed to a debate on healthcare because Mitch McConnell told him the chamber would take up the 2015 ObamaCare repeal bill previously passed by Congress.

“If this is indeed the plan, I will vote to proceed and I will vote for any all measures that are clean repeal.”

This morning, @SenateMajLdr informed me that the plan for today is to take up the 2015 clean repeal bill as I"ve urged.

— Senator Rand Paul (@RandPaul) July 25, 2017

If this is indeed the plan, I will vote to proceed and I will vote for any all measures that are clean repeal.

— Senator Rand Paul (@RandPaul) July 25, 2017

As The Hill writes, Paul has pushed for a vote on the 2015 bill, which repeals large parts of ObamaCare"s requirements and regulations, instead of the GOP repeal-and-replace plan that Republicans have been working on this year. Even with Ryan"s approval it remains unclear if McConnell has the 50 votes he needs to proceed to debate.

In a major hurdle to the 2015 repeal bill, it would need 60 votes, and will likely fail because it won"t get the support of Democrats and some Republicans. However, the floated "skinny bill" just may be able to squeek through...

Obamacare Repeal Next Steps: Why Goldman Is Suddenly Far Less Optimistic

On Friday morning, in the aftermath of Trump"s surprising victory forcing the GOP Healthcare bill repealing Obamacare through the House, we noted that Goldman"s DC analyst Alec Phillips responded that, somewhat paradoxically, the impact on Trump"s broader economic agenda would actually be more adverse than most economist and pundits expected, stating that "the main effect of House passage is to delay the consideration of tax legislation, which looks even more likely than before to be delayed until 2018."

In a subsequent, and far more detailed note titled "Health Reform Gains Momentum as the Rest of the Agenda Slows", over the weekend Phillips has provided an extensive explanation why he believes that the passage of Trumpcare will likely adverse implications on Trump"s tax policy timeline.

Here is the summary from the Goldman analyst:

• House Republicans have passed their American Health Care Act (AHCA), moving repeal of the Affordable Care Act (ACA) one step closer to reality. However, while the House vote was necessary for ACA repeal, it is far from sufficient, and the process is likely to become harder after this first step.


• House passage increases the likelihood that health legislation will be enacted this year, though it still faces several obstacles. In the meantime, uncertainty regarding insurance regulation and subsidization could lead to lower enrollment and plan participation in the existing system, which has already struggled with weaker than expected enrollment and declining plan options.


• In isolation this legislative victory is likely to be interpreted as bullish for other aspects of the agenda, including tax reform, as it demonstrates that congressional Republicans may be able to form a working majority on controversial issues after all.


• However, the revival of health legislation, which could at least take a few more months to conclude, could substantially delay consideration of the remainder of the legislative agenda. This further reduces the likelihood that Congress will enact a tax cut before year-end, in light of the additional steps that would be necessary once the health bill has been enacted.


• While we continue to believe that tax legislation is likely to be enacted in early 2018, further delays could push consideration of tax legislation too close to the upcoming midterm election, reducing the likelihood that tax legislation is enacted in the next two years.

Here is his detailed breakdown why "A Longer Health Debate Means a Later Tax Debate"

Market participants, even those with no direct exposure to the health sector, have been watching the health care debate closely for signals regarding the rest of the political—and particularly, fiscal—agenda. However, in our view House passage of the AHCA sends a decidedly mixed signal for tax reform.

All other things being equal, the fact that House Republican leaders and the White House were able to assemble a majority in the House to support the AHCA suggests that it is more likely than previously expected that congressional Republicans might also be able to form a working majority on other controversial issues like tax reform. The current version of the AHCA also repeals roughly $1 trillion of taxes enacted to fund ACA subsidies. While these taxes are not directly related to tax legislation expected later this year, repealing these taxes in separate legislation would reduce the pressure on lawmakers to repeal some of them in tax legislation. Repealing these taxes is not essential to the tax reform effort, but makes it slightly easier.

That said, the direct effect of AHCA passage in the House is to likely delay the tax debate. As we have pointed out in the past, the rest of the fiscal agenda cannot move forward until the health issue is disposed with, either by enacting health legislation or, if health legislation stalls, through a decision by congressional leaders and the White House that they will postpone further consideration of health legislation in order to move on to other aspects of the agenda. This is because Republican leaders have decided to pass the health bill and the tax bill using the “reconciliation” process, which protects legislation from filibuster in the Senate and allows it to pass with only 51 votes—i.e., potentially with only Republican votes.

However, only one tax bill and one spending bill can be passed under the reconciliation process in each budget cycle, so congressional leaders decided earlier this year that the health bill would be passed first, followed by the FY2018 budget resolution, which would include a second set of instructions to pass tax legislation under the reconciliation process. Only after the FY2018 budget resolution passes would the actual tax legislation itself be considered by the House and Senate.

Until this week, the latter had looked more likely, as the House had appeared unlikely to pass the AHCA even after modifications, and prospects in the Senate looked even dimmer. Instead, Republican leaders now appear likely to pursue health legislation for a while longer. In the Senate, Finance Committee Chairman Orrin Hatch, whose committee will oversee both the health and tax legislation, said this week that Senate Republicans would like to finish the health bill by the end of July. While this seems like a reasonable goal, this issue has tended to take up more time than expected so far, and the risk is that the remaining steps take longer as well. Moreover, with congressional recess scheduled for the month of August and a contentious debate over spending and the debt limit likely in September and/or early October, the timeline suggests that tax legislation might not see the light of day until well into Q3 if not Q4, and that enactment is unlikely before Q1 2018.

Healthcare Before Taxes

This drawn out timing raises risks to the enactment of tax legislation, in our view. Spending the time and energy that is likely to be required to pass health legislation will reduce the political momentum for a tax bill. While there is no obvious political reason that a simple tax cut could not be enacted in early 2018, further delays could push consideration of tax legislation too close to the upcoming midterm election, reducing the likelihood that tax legislation is enacted in the next two years. We continue to believe that a tax cut is more likely than not, but as the debate on health legislation drags on the risks to this outcome have become higher in our view.

Some other big picture considerations from Goldman, looking at the state of healthcare "four months later"

The House passed the American Health Care Act (AHCA) on May 4, by a 217-213 vote. The vote occurred nearly four months after the House passed the initial instructions calling for passage of ACA repeal legislation. Over that period, the legislation changed several times; the approach House Republicans were initially expected to take was to pass two pieces of legislation, the first repealing most of the ACA, with a delayed effective date, and the second replacing it with a new system of benefits. If considered separately, this would have allowed for quick passage of repeal legislation and more careful consideration of the “replacement” bill at a later date. Various Republican lawmakers resisted this strategy, and Republican leaders instead opted for a single-bill approach. While this ultimately satisfied a majority of the House, it also took four months to accomplish. The remainder of the process might take at least this long.

Among the most important changes the AHCA makes are the repeal of the ACA’s expansion of Medicaid eligibility to adults with income up to 138% of the federal poverty level (about $34,000 per year for a family of four) and the shift of tax credits based on income and average premiums to a credit adjusted solely for age. The legislation would also change regulation of the individual insurance market, by allowing greater variation in premiums by age and the potential for premium variation by health status for individuals who do not maintain continuous coverage. The various changes take effect at different points over the next few years, with different transition periods, as shown in Exhibit 1.

Exhibit 1: The American Health Care Act

* * *

As noted previously, while ACA may have passed the House, now comes the hard part: the Senate:

Although House passage keeps the ACA effort alive, it might not move it very far forward. Senate passage is apt to be harder than House passage, in our view, for political as well as procedural reasons. The main political challenge is simply that 50 of 52 Republicans will need to support the bill in the Senate, and several have already raised concerns with the House-passed legislation. Among the political challenges:

• Major changes might be needed to bring centrist and blue-state Republicans onboard: Republicans representing states that voted Democratic in the last presidential election (or were very competitive) may have reservations regarding the bill. Sen. Collins of Maine has indicated opposition to the House-passed bill, for instance, citing the structure of tax credits, insurance regulatory changes, and the effect on Medicaid (Maine has not expanded its Medicaid program under the ACA). 


• Expansion-state Republicans will probably try to preserve Medicaid funding: 20 of the 52 Republicans in the Senate represent states that expanded eligibility for the Medicaid program. Four Republican senators—Sen. Gardner of Colorado, Sen. Murkowski of Alaska, Sen. Portman of Ohio, and Sen. Moore-Capito of West Virginia—have opposed an earlier version of the House legislation over its Medicaid cuts (the latest version does not change these provisions substantially). This is likely to be a critical consideration for some Republican senators whose states expanded Medicaid, as this was the primary source of coverage gains under the ACA. Projected coverage losses (Exhibit 2) have been one of the most controversial aspects of the legislation, and the publication of new estimates in the next couple of weeks may create additional political friction in the Senate. 

Coverage Would Revert to Pre-ACA Levels 

These political challenges might be overcome by substantial modification to the legislation, though this would risk losing support from conservative senators who have already expressed reservations about the amount of spending that would be maintained under the legislation, like Sen. Paul of Kentucky. However, even if Senate Republicans can agree in principle on how to modify the House’s bill, they also face two procedural obstacles:

• The Byrd Rule in the Senate: The AHCA is being considered under the reconciliation process, which affords it special procedural protections in the Senate, namely that it cannot be filibustered and thus requires only a simple majority to pass. With little prospect of Democratic support, this is essential to passage. However, with these privileges come costs; the Byrd rule in the Senate prohibits policy changes from inclusion in reconciliation legislation that are primarily non-budgetary in nature. In the context of the AHCA, this could pose a challenge for the changes to insurance market regulation in the House bill, including those that were central to winning support from conservative Republicans in the Freedom Caucus.


• Budgetary restrictions: The House-passed legislation was estimated to reduce the deficit by roughly $150bn over ten years before the latest round of changes were made. Congressional budget rules prohibit the Senate from changing the House-passed legislation to produce less savings. This could make reaching consensus more difficult, since several Senate Republicans will want to add back Medicaid funding or other health insurance subsidies. One solution to this would be to delay the repeal of the ACA taxes by a few years to allow for greater spending without reducing the net savings under the bill, but going too far in this direction could lose the support of conservative Republicans in the Senate and could make a compromise with the House more difficult.

Beyond the need to reach agreement in the Senate, Republican congressional leaders and the White House will also need to broker an agreement between the House and Senate on a single final version that both chambers can agree on. This is likely to prove to be the most difficult part of the process, given differences between the Freedom Caucus in the House and centrists in the Senate.

Finally, Goldman"s take on "The Shape of Things to Come"

Given these political challenges, Republican leaders might consider alternative approaches to address the ACA. The seeds of a potential compromise among House and Senate Republicans are visible in some recent Republican proposals:

• State flexibility: The recent compromise in the House allows states greater flexibility in certain areas; states would be able to opt in to an alternative block-grant structure for Medicaid, which allows greater flexibility in benefit design, and to opt out of certain insurance rules under the ACA, like the prohibition on pricing premiums based on health status (the current legislation would continue to prohibit this for applicants who maintain continuous insurance coverage). State flexibility could in theory be expanded to two other areas to broaden support for the legislation: first, states could be allowed a greater role in administering the subsidies for insurance in the individual market. The Cassidy-Collins plan in the Senate, for instance, would give states a choice of maintaining the current system of tax credits or moving into a new system based on subsidized health savings accounts. Second, conservatives and many Republican governors have supported allowing states more flexibility in managing their Medicaid programs. It is conceivable that a compromise between centrist and conservative Republicans could be reached by preserving a greater share of existing subsidies for health insurance (including the expansion of the Medicaid program under the ACA) but allowing states a greater role in determining the structure of these benefits. Of course, such a compromise could be constrained by some of the procedural issues noted earlier.


• Shifting risk: A common aspect of recent Republican health proposals has been to shift financial risk for health cost growth from the federal government to individuals enrolled in federal health programs and/or to state governments that share the cost of the Medicaid program. Medicare reform efforts over the years largely followed this model, as does the AHCA. It provides a tax credit for health insurance that varies by age but grows with medical CPI plus 1pp, rather than with the increase in the average health premium as the current subsidy does. It also would shift states to a per-capita or block-grant system that would cap the federal government’s exposure to increasing costs in these areas. The final negotiations on the House healthcare bill hinged on the distribution of risk between individuals and the government, and this looks likely to continue to be modified.


• Delayed implementation: The current legislation delays repeal of the Medicaid expansion until 2020 and allows current expansion enrollees at that point to continue coverage. Centrist Republicans seem likely to push for an even longer phaseout. It also appears possible that they could seek to slow changes to the refundable tax credits for insurance in the individual market. This could actually return the debate closer to where it started, when congressional Republican leaders planned to repeal the ACA but would have delayed the effective date by several years, expecting to make additional changes in the interim.

If comprehensive legislation fails, Republicans might instead opt to target a few unpopular provisions of the ACA instead. One provision might be the mandate on individuals to enroll in health insurance or face financial penalties. Repealing this provision would have the benefit of simplicity and could probably win broad Republican support. However, it would produce much less budgetary savings than the current legislation and would still probably substantially increase the projected uninsured population. Since it would not reduce spending enough to offset the repeal of nearly the $1 trillion in ACA taxes that the current legislation repeals, this option might be contemplated as a last resort if broader legislation stalls but looks unlikely to come up in the near term.

Obamacare Repeal Suddenly Looks Possible After Two Key GOP Holdouts Flip

In what may be a critical flip for the passage of the Republican healthcare bill - not to mention boosting Trump"s image as dealmaker - moments ago Republican reps. Fred Upton and Billy Long both said Wednesday they will support the GOP’s ObamaCare repeal-and-replace bill with the addition of a new amendment Upton drafted. Until this morning, both had opposed the bill, and prompted us to write on Monday that Republicans are just one vote away from failure again. 

The two Republicans told reporters at the White House after a meeting with President Trump that they are ready to vote for the bill once a new amendment Upton helped devise - which would boost funding for people with pre-existing conditions - is added. The amendment would provide $8 billion over the next 5 years to reduce premiums and other costs for those with pre-existing conditions who have a gap in coverage and reside in states that received waivers from some of Obamacare’s requirements.

Quoted by Bloomberg, Upton said that "I think it is likely now to pass the House" but hedged, adding that he’s “not in the whip count” and can’t definitively say there are enough votes for the bill to pass.  Upton said a vote could be held as soon as Thursday. 

Majority Whip Steve Scalise told The Hill that the Upton amendment meant that he was putting both Upton and Long back in the "yes" column for his internal whip count. House GOP Conference Chairwoman Cathy McMorris Rodgers (R-Wash.) told The Hill the late change "absolutely" added net votes to the GOP tally.

Then again, maybe this is just the latest optimistic "false alarm": Rep. Charlie Dent, a co-chairman of a group of House Republican moderates, said he still opposes the health bill, even with the latest changes. Another leading moderate, Leonard Lance of New Jersey, said he also hasn’t been swayed by the changes.

Further details from Bloomberg:

Democrats immediately blasted the change, with Senate Minority Leader Chuck Schumer saying: “The proposed Upton amendment is like administering cough medicine to someone with stage 4 cancer."

Other Republicans haven’t seen details or text of the amendment, but health-care experts said the added funding is unlikely to make a big difference, unless very few states receive those waivers.

Other similary did not express much confidence: the $8 billion in funding is a “drop in the bucket,” said Matt Fiedler, a fellow at the Brookings Institution’s Center for Health Policy. He said the funding, even including the bill’s stability fund and risk-pool funding, wouldn’t be enough to fully protect people with pre-existing conditions from facing higher costs.

Still, it was enough for the White House which earlier expressed optimism, with budget director Mick Mulvaney telling Fox News on Wednesday that the chamber might vote on the health bill as early as Saturday. Mulvaney said he believes the amendment by Upton - the most significant Republican defection yet on Tuesday - will help draw moderates’ support for the legislation.

Congress Reaches Deal To Keep Government Open Through September

Update: Senate Democratic Leader Chuck Schumer seems very positive on the bipartisan agreement too (but can"t resist a few jabs at President Trump)...

"This agreement is a good agreement for the American people, and takes the threat of a government shutdown off the table.

The Bill "ensures taxpayer dollars aren’t used to fund an ineffective border wall, excludes poison pill riders, and increases investments in programs that the middle-class relies on, like medical research, education, and infrastructure"

"Early on in this debate, Democrats clearly laid out our principles.." and the deal "reflects those principles."

*  *  *

As we detailed eariler, one of the biggest political overhangs facing the market may have just been removed, when moments ago AP and other newswires reported that House Democrats and Republicans are said to have reached a $1 trillion spending deal to keep the government - which is currently operating thanks to a last minute one-week stopgap measure enacted on Friday - open until October 1.

BREAKING: Congressional Republicans, Democrats reach agreement on $1T measure to fund government until Oct. 1.

— AP Politics (@AP_Politics) May 1, 2017

According to Washington Post, negotiators from both parties reached an agreement on a spending package to fund the government through the end of September, alleviating fears of a government shutdown later this week. Congress is expected to vote early this week on the package, with the bipartisan agreement expected to include increases for military spending and border security, a major priority for GOP leaders in Congress.

The agreement follows weeks of tense negotiations between Democrats and GOP leaders after President Trump insisted that the deal include funds to begin construction of a wall along the U.S. border with Mexico. Trump eventually dropped that demand, leaving Congress to resolve lingering issues over several unrelated policy measures.

There is a non-trivial chance the Sunday night announcement is merely a trial balloon, because as the WaPo adds "the details of the agreement were not yet clear on Sunday night" which would suggest that there is a high likelihood that whatever tentative deal was reached, ultimately falls through.

For now, however, this is good news, and it has sent both the pound and yen sliding, and the dollar rising on hopes that politics will not be a major risk factor for at least 5 months.

House Republicans have struggled in recent weeks to keep their members focused on spending as White House officials and conservatives pressed leaders to revive plans for a vote on health-care legislation. The health-care fight became tangled last week with the spending talks as leaders worried that forcing a vote to repeal the Affordable Care Act risked angering Democrats whose votes are necessary to avoid a government shutdown.

Another possible threat is that the GOP pushes on with Obamacare repeal, a gambit which may prompt Democrats to withdraw any support they voiced for Sunday"s "deal."

GOP leaders worked last week to determine if there are enough votes in the House to pass a revised health-care bill brokered by the White House, the head of the conservative House Freedom Caucus and a top member of the moderate Tuesday Group. House Speaker Paul D. Ryan (R-Wis.) and his top lieutenants announced Thursday that they did not have sufficient votes to be sure the health-care bill would pass but vowed to press on.

“We’re still educating members,” House Majority Leader Kevin McCarthy (R-Calif.) told reporters after a late-night health care meeting last week. “We’ve been making great progress. As soon as we have the votes, we’ll vote on it.”

And now, in the spirit of trial balloons everywhere, we await the denial from yet other "unnamed sources."

Trump's Second Obamacare Repeal Attempt On The Edge Of Collapse

Exactly one month after Trump was humiliated by his own party, when in the last moment the House failed to get the number of votes to pass a Republican healthcare bill due to holdouts from the conservative Freedom Caucus, the president"s second attempt to repeal Obamacare before his first 100 days in office run out, appears on the edge of failure. However, whereas the latest effort succeeded in appealing to the conservatives who caused the first vote to be pulled in the last moment, this time is the moderates who are about to pull the plug on Trump"s - and Paul Ryan"s - second attempt to overhaul Obamacare.

As a reminder, in order to appeal to conservatives, the revised bill was negotiated by centrist Rep. Tom MacArthur (R-N.J.) and conservative Rep. Mark Meadows (R-N.C.) and was meant to allow states to opt out of some of ObamaCare’s requirements, which however could result in people losing their current health coverage or facing much higher premiums. While the changes aimed at winning over conservatives, proved successful, in the process the new bill might have lost just as many centrists. According to the latest roll call by The Hill, at least 21 Republicans have said they would vote no on the revised GOP healthcare bill. Only 23 votes are required to kill the bill.

"The mood is still guardedly optimistic," said Representative Chris Collins, a moderate and Trump ally who supports the bill. "There are, I’m going to say, still some "lean no"s" that we’ve just got to get over the hurdle ..."

The "no" votes include Reps. Patrick Meehan (Pa.), Ryan Costello (Pa.), Barbara Comstock (R-Va.), Jaime Herrera Beutler (Wash.) and John Katko (N.Y.), all centrists who had reservations about the previous ObamaCare repeal bill that was pulled from a floor vote last month because of a lack of GOP support. The Hill adds that on top of that, a trio of usually reliable Republicans — Foreign Affairs Committee Chairman Ed Royce (Calif.), Adam Kinzinger (Ill.) and Mario Diaz-Balart (Fla.) — said that they were undecided on the new bill after saying they were yes votes on the earlier legislation.

“I’m absolutely undecided,” Diaz-Balart, a member of the GOP whip team, told The Hill. “I was a yes before, but there are a lot of red flags” with the revised bill.

It also remains unclear how dozens of other Republicans would vote this time, but the number of Republicans publicly opposed or leaning against the bill is enough to raise doubts about whether the House would pass it in its current form. In fact, just two more no votes would be sufficient to end the latest push.

Centrists opposed to the new bill are largely echoing Rep. Charlie Dent (R-Pa.), who said the negotiations between Meadows and MacArthur only exacerbated his earlier problems with the bill. Dent, in an interview on MSNBC’s “Morning Joe” on Thursday, said he worried that people with pre-existing health conditions might be left without insurance because of the changes, something supporters of the bill have fiercely denied.

Many members of the centrist Tuesday Group members complained that the MacArthur-Meadows amendment pushed the bill too far to the right, and they privately griped that MacArthur had shifted blame for the stalled healthcare effort from conservatives to centrists.

The White House has kept the pressure on GOP leaders to hold a vote by President Trump’s 100th day in office, Saturday. But they say they won’t bring their revised bill to the floor until they secure the 216 needed GOP votes. And right now, they acknowledge, they don’t have them.

Speaking earlier on Thursday, Paul Ryan said that “I think we’re making very good progress. … We’re going to go when we have the votes, but that’s the decision we’ll make when we have it." For now, however, there is no indication of progress, in fact quite the opposite.

There are other considerations among voting republicans, many of whom are up for reelection next year and are "running scared." According to the Hill, one moderate Republican was overheard in a House cafeteria this week telling an aide: “If I vote for this healthcare bill, it will be the end of my career.”

Finally, there are significant doubts about whether the legislation would go anywhere in the Senate.

Several Senate Republicans have raised questions about the bill, making it unclear whether it could win 50 votes in the upper chamber.

And Senate Democrats have said that parts of the bill, including the new language, would run afoul of special budget rules the GOP is using to avoid a filibuster. That means those sections might have to be ripped out of the bill to prevent it from being dead on arrival in the Senate.

Should Friday come and go with no healthcare vote, there won"t be dramatic consequences, but it will mean even more embarrassment for Trump, who will have been defied by his own party twice in the span of 100 days.

There is a silver lining, if only for markets: with Democrats warning they "will not support a stop gap bill" to fund the government after Saturday if there is a healthcare bill this week - thus potentially resulting in a government shutdown -  at least the government will stay open for one more week. How a long-term deal can be achieved in one week, however, with animosity between the left and right growing by the day, remains very much unclear.

Democrats Take Government Hostage: Threaten To Shut It Down If GOP Repeals Obamacare

Once again Republicans have managed to box themselves in.

Just as the GOP has reportedly found enough votes among conservative Republicans to pass the latest iteration of the proposed Healthcare bill, with Freedom Caucus Mark Meadows saying "republicans will have the votes to pass" Obamacare repeal, Democrats realized that they once again have the leverage to bring this whole process to a grinding halt halt. And they are using it.

As The Hill reports, House Democrats will oppose any short-term spending bill - which is what McConnell was hoping on passing to buy one week of time - if Republican leaders attempt to expedite an ObamaCare repeal bill this week, Rep. Steny Hoyer (D-Md.) warned Thursday. In other words, Democrats are now holding the government hostage indefinitely as long as Republicans - who now have the votes to pass new healthcare legislation - threaten to repeal Obamacare.

Hoyer, the Democratic whip, spoke with House Majority Leader Kevin McCarthy (R-Calif) Thursday morning to warn him of the Democrats" position. "If Republicans announce their intention to bring their harmful TrumpCare bill to the House Floor tomorrow or Saturday, I will oppose a one-week Continuing Resolution and will advise House Democrats to oppose it as well,” Hoyer said in an email.

“Republicans continue to struggle to find the votes to pass a bill that will kick 24 million Americans off their health coverage, allow discrimination against those with pre-existing conditions, and impose an age tax on older Americans. That"s why they are trying to jam it through the House before their Members can hear from the American people this weekend about their opposition to this horrible legislation.”

"If Republicans pursue this partisan path of forcing Americans to pay more for less and destabilizing our county"s health care system — without even knowing how much their bill will cost — Republicans should be prepared to pass a one-week Continuing Resolution on their own,” Hoyer said.

As the Hill adds, the threat is significant because GOP leaders will likely need Democratic votes to pass a short-term spending bill in the face of opposition from conservatives historically opposed to government funding bills. Even Trump has chimed in... again.

As families prepare for summer vacations in our National Parks - Democrats threaten to close them and shut down the government. Terrible!

— Donald J. Trump (@realDonaldTrump) April 27, 2017

Ironically, as long as the GOP was split internally, and appeared it did not have enough votes to repeal Obamacare, the government shutdown was a negligible risk. However now that Democrats have realized that the new bill may just pass, they are using the biggest leverage they have: holding one-week continuing resolutions indefinitely, in the process assuring that Republicans may never be able to pass Obamacare repeal, with the government being funded on a week-by-week basis only as long as the GOP agrees not to pass such a vote.

The Democrats’ move comes as bipartisan negotiators in both chambers are getting closer to an agreement on an omnibus spending bill to prevent a government shutdown. If Congress doesn’t act before midnight Friday night, much of the federal government would shut down.

The market, naturally, has noticed, and as Citi observes "the latest bout of headlines has investors on edge - US Republicans and Senate in deep conflict. Speaking to our desks, interest seen - especially for USDJPY - appears to be largely short-term, reactionary. As we type, the market looks for a base. USDJPY now 111.20. US 10y yield at 2.2950%."

How this particular impasse will be resolved remains unclear.

"It's A Train Wreck": Conservative Groups Revolt Against GOP Healthcare Plan

As discussed earlier, the Obamacare repeal and replace effort, derisively called by some either "Obamacare Lite", "RyanCare", "ObamaCare 2.0",  and even Trumpcare". is running into major hurdles as prominent consevative groups threaten to derail Trump"s broader economic agenda.

While The Trump administration on Tuesday formally backed the House GOP"s plan to repeal and replace ObamaCare, early hurdles emerged after tea partiers Rand Paul and Mike Lee both said that the proposed plan will not pass because it is too similar to the original healthcare law, while GOP senator Roy Blunt said that the plan as it stands may not be able to get the support needed to pass the Senate.  "What I don"t like is, it may not be a plan that gets a majority votes and let"s us move on. Because, we can"t stay where we are with the plan we"ve got now," Blunt said on KMBZ, as first reported by CNN.

The two are just the tip of the iceberg.

As The Hill writes, outside conservative groups on Tuesday blasted House Republicans’ newly unveiled healthcare proposal, saying it doesn’t live up to the GOP’s promise of fully repealing ObamaCare. Here are some of the more prominent objectors:

The Club for Growth dubbed the proposal “RyanCare” and threatened to record names of Republicans who vote for the bill unless it includes significant changes.

Americans for Prosperity/Freedom Partners called the plan "Obamacare 2.0"

The Cato Institute called the plan a "TrainWreck"

Heritage Action, FreedomWorks and the Koch brothers-backed Americans for Prosperity, a group aligned with billionaire industrialists Charles and David Koch, also issued scathing statements highly critical of the "American Health Care Act," which was released on Monday.

FreedomWorks panned the GOP bill as "ObamaCare-Lite," while AFP labeled it "ObamaCare 2.0." “This is simply not a full repeal of ObamaCare. It falls far short of the promises Republicans made to the American people in four consecutive federal elections,” AFP President Tim Phillips said in a phone interview Tuesday. “The proposed legislation trades one form of government subsidy for another government subsidy, and doesn’t roll back the mandate of ObamaCare. It"s a poor first attempt.”

In short, conservatives don"t like the bill in its current form, and as the Hill puts it, "the seemingly coordinated statements — all released within an hour of each other — from these four big-money, influential conservative groups create a huge headache for Speaker Paul Ryan (R-Wis.) and the two authors of the House bill: Energy and Commerce Committee Chairman Greg Walden (R-Ore.) and Ways and Means Committee Chairman Kevin Brady (R-Texas)."

Assuming all members vote and all Democrats vote no, it would take 22 House GOP defections to kill the bill. Just three Republican votes could sink the legislation in the Senate.

As noted above, two Tea Party darlings, Sens. Rand Paul (R-Ky.) and Mike Lee (R-Utah), have already come out against the GOP plan, as have former House Freedom Caucus Chairman Jim Jordan (R-Ohio) and conservative Reps. Justin Amash (R-Mich.) and Dave Brat (R-Va.). As we explained yesterday, many on the right are objecting to the plan’s refundable tax credits, which would replace ObamaCare insurance subsidies.

“If it’s a new federal plan, I do not like it because the federal government has shown itself unable to constrain itself when it comes to fiscal matters,” Brat told The Hill. “As a result, Medicare and Social Security are insolvent and our health system will be next.”

Club for Growth said it will “key vote” the bill, meaning it will include how lawmakers vote on it when calculating grades for members of Congress, and whip votes against the House proposal unless major changes are made.

“The problems with this bill are not just what’s in it, but also what’s missing: namely, the critical free-market solution of selling health insurance across state lines,” Club for Growth President David McIntosh said in a statement. “Such an injection of competition would lead to hundreds of billions of dollars in savings, nullifying any argument by Congressional Republicans that this provision cannot be included in the current bill.  “Republicans should be offering a full and immediate repeal of Obamacare’s taxes, regulations, and mandates, an end to the Medicaid expansion, and inclusion of free-market reforms, like interstate competition.”

Meeting a tide of early criticism, the plan"s architects were busy defending it starting Tursday morning. Brady, a main architect of the bill, pushed back on the conservative objections at a joint news conference with Walden on Tuesday. Brady said the bill is similar to legislation from then-Rep. Tom Price (R-Ga.), now secretary of Heath and Human Services, which "had 84 cosponsors including members and leaders of the Freedom Caucus, the RSC and the Republican conference."

"As Republicans we have a choice,” Brady said. “We can act now or we can keep fiddling around and squander this opportunity to repeal ObamaCare and begin a new chapter for the American people.”

For now, at least, it appears that many would prefer to fiddle, even if that means risking alienating some of their core constituents, a point made by the AFP"s Phillips who, fresh from an anti-ObamaCare rally by the Capitol, warned that there will be electoral consequences for Republicans if they don’t fully repeal the current health law. He said 88 percent of House Republicans have previously voted for full repeal in the past, as have 97 percent of Senate Republicans.

“This is not a new issue. It’s been out there for eight years and Republicans have been unambiguous about repealing ObamaCare,” Phillips told The Hill. “The American people took their word for it and gave them the largest majority in the House. 

‘But this will be shortest-lived majority in the modern era if they fail to fully repeal ObamaCare.”

The vice president himself appeared to lash out at hold outs in the Senate saying "My message to GOP Senate: If you like ObamaCare, you can keep it, but people want change & fact is ObamaCare must go."

My message to GOP Senate: If you like ObamaCare, you can keep it, but people want change & fact is ObamaCare must go. pic.twitter.com/YvQeEV7Kqd

— Vice President Pence (@VP) March 7, 2017

In addition to ripping the House plan, FreedomWorks national director of campaigns, Noah Wall, also called out four GOP senators — Rob Portman (Ohio), Shelley Moore Capito (W.V.), Cory Gardner (Colo.) and Lisa Murkowski (Alaska) — for saying they could not support the House bill because it did not assist people in their states who are covered by ObamaCare’s expanded Medicaid program.

"Sens. Portman, Capito, Gardner, and Murkowski would be in jail with Bernie Madoff if they had orchestrated such a fraud in the private sector. They have scammed the American people,” Wall said in a statement. “They supported a strong repeal bill when they knew President Obama would never sign it, and now they won’t support the same language because President Trump might sign it.”

Meanwhile, the Trump administration formally backed the GOP plan in a letter Tuesday, with Secretary of Health and Human Services Tom Price writing that it would serve as a good first step. "These proposals offer patient-centered solutions that will provide all Americans with access to affordable, quality healthcare, promote innovation and offer peace of mind for those with pre-existing conditions," Price wrote.

To sum up, here is a great cheat sheet courtesy of Axios of all those who have so far expressed objection to the plan in its current form.:

Organizations:

Politicians:

Finally, for those who missed it, here is Goldman Sachs again explaining why any delays in passing the Obamacare alternative plan, will lead to major delays for the rest of Trump"s economic agenda:

"the slow process on ACA repeal signals that tax reform is likely to take longer than initially expected and that the final tax legislation that Congress enacts is likely to be less radical than the early proposals from House Republicans and the Trump campaign. That said, while tax legislation looks likely to be delayed we expect it to move forward eventually."

And putting it all together, here is Goldman"s chart showing "the long year ahead" and where we are right now.

Trumpcare: What Happens Next, In One Chart

Overnight, House republicans released their long-awaited proposed legislation to repeal and replace Obamacare, which many have already dubbed Trumpcare. We laid out some of the key changes and proposed provisions as part of the new law which will now be debated, first in committee as soon as Wednesday, and then will seek the approval of the House and Senate. It is here that things may turn more complicated.

In terms of next steps, there are five immediate action items that politicians and pundits will focus on, courtesy of Axios:

• How will the conservative Republicans react? They"re the ones who threatened to vote against anything less aggressive than the 2015 repeal bill, which this definitely is. Freedom Caucus chairman Mark Meadows said on Hannity last night that "we"re making progress," but other early signs aren"t good: Rep. Jim Jordan reportedly doesn"t like it, a Republican Study Committee memo calls it a "Republican welfare entitlement," and Rep. Justin Amash tweeted that it was "Obamacare 2.0."


• Will there be a Medicaid backlash? That looked like a serious danger after four GOP senators from states that expanded Medicaid said they wouldn"t support the changes they saw in an early draft. But they softened their tone after a meeting with Senate Majority Leader Mitch McConnell Monday night, Caitlin Owens reports. "It"s moving in the right direction," said West Virginia"s Shelley Moore Capito, one of the worried senators.


• How many people would be covered? Normally, the Congressional Budget Office would tell them that. But not this time — because the committees are plowing ahead without waiting for the cost and coverage estimates.


• No Congressional Budget Office score? Really? They"re going to take a lot of heat from Democrats for that decision — Democrats are already accusing them of trying to hide the likely losses of coverage. The key, though, is how many Republicans are uncomfortable with it too. "That seems problematic." Sen. Bill Cassidy told Caitlin, adding: "I"m trying to be diplomatic."


• Do they actually know how to pay for it? Here"s what House Republicans answer the "how will you pay for it" question in their FAQs: "We are still discussing details, but we are committed to repealing Obamacare and replacing it with fiscally responsible policies that restore the free market and protect taxpayers."

A bigger picture question is how long will the entire process of repeal and replace take. Conveniently, over the weekend Goldman"s Alec Phillips address this issue. Here are this thoughts:

We think there is a good chance that Congress will resolve the ACA debate in Q2. Activity on the issue will intensify over the next few weeks; House committees may begin to vote on legislation as soon as the week of March 6. This could allow for passage by the full House by late March or early April, if plans remain on track. However, even on that timetable, the Senate is likely to take longer, and the odds that the Senate sends the President a bill prior to the congressional spring recess (April 10-21) seems fairly low. If so, final resolution could be pushed until May, in light of the upcoming debate on the confirmation of Supreme Court Justice nominee Neil Gorsuch and the April 28 expiration of federal spending authority, which will require new spending legislation to avoid a temporary government shutdown.

That"s the best case scenario. Here is the worst-case:

If Republican leaders cannot send the President an ACA bill by April or May, they will face two politically unpalatable options. First, they could continue to press for a solution, delaying consideration of tax reform for an indefinite period. This delay would occur because both proposals are expected to be considered under the “budget reconciliation” process. However, since only one tax bill and one spending bill can be considered under that process in each budget cycle—and ACA repeal legislation is expected to have tax and spending provisions—Republican leaders plan to consider the ACA bill in the FY2017 budget cycle, and to begin the FY2018 budget cycle, including instructions to pass tax reform, once the ACA bill has passed. A second option would be to postpone ACA legislation and move to tax reform, essentially reneging on a campaign commitment. 

Goldman also notes that beyond the timetable, the ACA debate is a reminder that enacting ambitious structural reforms on a partisan basis is difficult, for two reasons. First, shared accountability allows lawmakers to take greater political risks. Over the last few decades, most of the major fiscal reforms were enacted under divided government, as this allows for shared responsibility: the Social Security amendments in 1983, the Tax Reform Act of 1986, and the various deficit reduction measures of the late 1980s and 1990s all come to mind. Of course, this is not always the case; the ACA passed along party lines in 2010.

Second, relying on only Republican votes results in a very thin vote margin, particularly in the Senate. Republicans in that chamber have 52 seats, and will need 51 votes (potentially including Vice President Pence’s tie-breaking vote) to pass ACA or tax legislation through the budget reconciliation process. Although this is often sufficient on issues where there are clearly defined differences between the parties, it makes it quite difficult to pass legislation where lawmakers have more idiosyncratic concerns, as is often the case in tax reform.

As to why a potential Trumpcare slowdown is relevant, the answer is simple: delays would likely lead to substantial delays for the bulk of Trump"s proposed economic agenda, putting prompt implementation of his tax reform in jeopardy, as Phillips explains:

"the slow process on ACA repeal signals that tax reform is likely to take longer than initially expected and that the final tax legislation that Congress enacts is likely to be less radical than the early proposals from House Republicans and the Trump campaign. That said, while tax legislation looks likely to be delayed we expect it to move forward eventually."

Finally, putting it all together, here is Goldman"s chart showing "the long year ahead"