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September 27, 2017Key Gold Headlines

Can Republicans in Congress Get Anything Done?

Obamacare repeal 3.0 went down in flames Tuesday. According to Bloomberg, opposition from three Republican Senators derailed the latest attempt to dismantle the Affordable Care Act.

Leaders decided the Senate won’t vote before Saturday’s deadline to use a fast-track procedure to keep Democrats from blocking a GOP-only bill. On Monday, Republican Senator Susan Collins of Maine added her opposition to that of GOP Senators John McCain of Arizona and Rand Paul of Kentucky, enough to sink the legislation in the 52-48 Senate.”

This raises broader questions: Can Republicans get anything done? Is there any chance of Trump pushing through his ambitious economic agenda?

Calling the so-called  Graham-Cassidy bill a “repeal” was a bit of a stretch. It would have turned Obamacare Medicaid funds into block grants to the states, and repealed the penalties that enforce the individual and employer mandates. Most of the ACA taxes and insurance regulations would have stayed in place. In fact, even the mandates would have technically remained on the books. The penalties would have simply been set at zero.

According to Bloomberg, Health Chairman Lamar Alexander wants to work out a bipartisan plan to “stabilize Obamacare’s health insurance markets.” In other words, the Tennessee Republican wants to work with Democrats to “fix” Obamacare.

It seems pretty obvious the Affordable Care Act isn’t going anywhere. According to the Bloomberg report, Graham and third-ranking Senate Republican John Thune of South Dakota said the next realistic opportunity for Republicans to repeal Obamacare will come in the 2019 fiscal year.

Senate Majority Leader Mitch McConnell said the Republicans “haven’t given up on reforming the health-care system.” but “we’re not going to do it this week.”

Senator John Kennedy of Louisiana said the Graham-Cassidy plan is “dead as a doornail. Let’s go to tax reform.”

Republicans promised for seven years to repeal Obamacare. Trump made getting rid of the Affordable Care Act one of the pillars of his economic agenda – along with tax cuts, regulation reduction and infrastructure spending. But even with control of both houses of Congress and the White House, the GOP can’t get it done.

So, can the Republicans get anything done? Can this bunch really deliver on the economic promises Trump campaigned on?

The GOP has now set its sights on tax reform, but the notion that the same bunch that has failed three times to get rid Obamacare can actually push through substantive tax reform seems dubious. In fact, the entire Trump economic plan could be little more than wishful thinking.

This is a big problem because a lot of people bet a lot of money on Trump delivering economic nirvana.

In the wake of Trump’s election, stock markets continued their meteoric rise. Some have dubbed it the Trump Trade or the Trump Bump. It rests on the idea that the president’s proposed policies of lower taxes, infrastructure spending, Obamacare repeal, and decreasing government regulations will juice the economy. If it becomes clear most of this isn’t going to happen, that trade will eventually unwind.

In other words, the stock market bubble is going to pop.

Some analysts have said all along counting on Trump to bring about significant change was foolhardy. As the House wrestled with Obamacare repeal last April, Jim Rickards said implementation of the Trump economic agenda was “sheer fantasy.”

The idea that Congress and the White House can somehow revive Obamacare repeal, reform the Internal Revenue Code, pass a major spending bill, raise the debt ceiling cap, and extend the continuing resolution to keep the government going until the budget is complete is sheer fantasy. It’s more likely that the Congress will descend into partisan fights between Democrats and Republicans, and internal fights among various Republican factions.”

Granted, Congress did manage to raise the debt ceiling so it can keep spending money. You can thank the hurricanes for making that a relatively painless process. Once relief money was tied to the debt ceiling increase, few were going to oppose it. Of course, racking up more debt isn’t exactly the pathway to economic prosperity. As we reported recently, the spiraling debt coupled with rising interest rates would crush the US budget under interest payments.

The only other Trump economic policy that seems likely to become reality is protectionism. Trump wants tariffs. North Korea my offer an opportunity to slap some on China. Treasury Secretary Steven Mnuchin threatened sanctions if China doesn’t go along with the most recent sanctions imposed on the belligerent North Korean regime. But like running up debt, a trade war with your biggest trading partner isn’t a blueprint for economic growth.

Peter Schiff has said a lot of Americans suffer from false optimism when it comes to Donald Trump. The president inherited a mess. Congress isn’t going to fix it. If Republicans can’t even pass modest reforms to Obamacare, how will they ever push through substantive tax reform? It just doesn’t seem likely.

I think a lot of people actually believe this is a game-changer, that he’s going to drain the swamp, that he’s going to solve all the problems, and people are now optimistic. Unfortunately, none of this is true. Nothing that Trump is likely to do is going to make any difference as far as the course we are on … Government is going to continue to grow. The Fed is going to keep printing money. We are continuing to head off the edge of an economic cliff.”


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