The probability of the Republican-crafted health-care legislation collapsing may now be as high as 60-40, and it’s likely the White House will “quickly shift the political agenda within days to an accelerated drive for the tax-reform legislation,” SGH Macro Advisors CEO Sassan Ghahramani writes in note.
* Health-care legislation seen collapsing either in failing to secure the votes needed for passage, or if Speaker Ryan pulls the bill
** White House last-minute pressure may work, “but it will be a tall order
* President Trump “is said in fact to be restless to get going” on tax reform
** “In terms of a new push on tax reform, the GOP ambitions will have to be significantly moderated after the political setbacks with the healthcare legislation”
** Border adjustment tax may be dropped in part or in whole
** “The new tax reform bill will need to either abandon budget neutrality altogether, secure a Senate ruling overriding the Byrd Rule for reconciliation, or limit the period of the tax cuts to three to five years to lower the needed revenue offsets”
* “Legislation to replace Obamacare would be shuffled to the back of the legislative queue, to be revived in a newly written bill late into the second half of this year”
** “If the House bill as written fails, there are no real Plan B options to revive the health care legislation”
* NOTE: The House Rules Committee plans to meet at 7am to set the terms of floor debate for the measure, which will likely see a vote in the main chamber by 10am