Now that Trump’s hope to replace Obamacare is dead indefinitely following last night’s mini rebellion in the Senate , and only the possibility of repeal remains although even that is not likely, pundits are asking what this means for Trump’s overall agenda, and whether it will accelerate or further delay (or block outright) the implementation of any other Trump proposal, chief among which is budget resolution, increasing the government debt ceiling and passing tax reform. Regarding the latter, the stakes are especially great because as Bank of America explained earlier, “there is a general consensus that without tax reform the GOP could lose their majority in the House.”
Still, for a market that has gotten used to ignoring everything out of Washington, if not virtually all newsflow, the reaction will likely be delayed because as BMO’s Ian Lyngen writes, investors will likely ‘start looking at the issue more closely in the coming weeks, but don’t expect any visceral market response till the 11th hour from either Congress or the markets.” Still, they warn that ‘the broader implications of this health-care failure may reverberate a bit more over time than markets may be currently assuming.”
So while we wait for the market response, what happens next? Overnight Goldman’s chief political analyst Alec Phillips writes that while Congress may still pass a health bill, it just won’t be this one and notes that the “enactment of much more narrowly-focused health legislation is still possible this year, in light of problems facing the individual insurance market for 2018.”
This post was published at Zero Hedge on Jul 18, 2017.
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