Repeal and Replace

by Marilou Moursund on March 15, 2017

in Healthcare,politics,taxes

With the media focused on yesterday’s CBO release of the scoring on the proposed Republican health care plan, I found this analysis from today’s Yardeni Research Morning Briefing interesting:

The bull obviously got recharged by the animal spirits unleashed following Election Day. Undoubtedly, investors got into the spirit as well on expectations that Trump’s Electoral College win along with the Republican majorities in both houses of Congress would allow the new administration to charge ahead with its program, particularly deregulation and tax reform. So far so good on the former, but the latter is on hold while Washington focuses on Affordable Care Act repeal and replace (ACA-R&R). Trump has declared that he intends to drain the swamp. Doing so is already proving to be hard and tedious work. The bull may also find it hard to charge ahead in the swamp water.

Melissa is our resident Washington watcher. Her theory is that Trump doesn’t care if the GOP’s healthcare bill doesn’t pass through Congress. If R&R fails to happen soon, he won’t press the issue. He’ll let it go and move on to tax reform under a 2018 budget resolution, which is being worked on behind the scenes as ACA-R&R takes center stage and flounders. Trump will be happy to let Obamacare implode on its own. Politically, Trump still can say he made ACA-R&R his first priority to protect healthcare for Americans, as he promised during the campaign. He can later also say “I told you so” to Congress once Obamacare totally implodes. “It could self-repeal in this scenario,” says Melissa. “Then Congress will have no choice but to replace it.”

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