100% Tax Reform, Better than 50% Health Care

Whenever I see David Schmick on TV, it’s like the old E.F. Hutton ad. When he talks, I listen.

Schmick is a very savvy former Capitol Hill staffer. His words count more than the average pundit because he’s been there done that, knows players very well and has the right measure of cynicism. He’s not one to seek attention or publicity, which right there adds to his believability.

Schmick was on Stuart Varney’s program this morning on Fox Business to talk about the Senate rollout of the Obamacare repeal and replace bill. Varney asked him what was going on in the Senate closed door meeting this morning “where they’re trying to hammer out healthcare reform.” Here’s what he had to say:

“The best way to look at it is what’s in Mitch McCeonnell’s brain right now. First of all, he’s probably three votes short. That’s where they were thinking last night. That doesn’t count the two moderate senators from Maine and Alaska who aren’t going to vote for this. But there’s a lot of bluffing going on right now. I saw one Republican senator saying ‘I’m shocked that the staffers are writing legislation.’ I mean, hello, it’s like Claude Rains in the movie Casablanca saying I’m shocked that there’s gambling going on here. The staffers always do it.

“There’s also very adroit play acting going on by the president who said the House bill is mean and heartless. So it makes it easier for the more traditional Republicans to vote for this bill. The normal play acting. They’ll be a lot of deal making – it will be on opioid funding, I’m sure a little bit more extension of the Medicaid, but Mitch McConnell is one thing. He is very knowledgeable about his caucus. So if you hear later this morning that he’s going to call a vote and that’s what he’s saying, a vote for next week, it means only that he’s within three votes.

“One other thing, that he has the ultimate bluff, too, with a lot of conservative skeptics of this bill. He is saying, privately, that if they don’t get the votes now they will come back after the recess but they’re just going to come back and this sounds like technical talk, regular order, which means they’ll open it up to the Senate. So they’ll pass the popular things that both Democrats and Republicans want and then it will just be chaos. Frankly if the Republicans had said to the Democrats in January this is your Obamacare problem, fix it, I think they would be taking all the blame but it’s gone too far now and I think that a lot of conservatives are going to say I really don’t want to see this opened up to the Senate because who knows what you get.”

Varney then asked if some of the Democrats’ unhappiness with leaders Pelosi and Schumer could have some of them voting for the Republican plan

Schmick replied, “I think on tax reform it’s very very possible at this point. We’re already seeing a lot of behind the scene discussions that weren’t there before the Georgia election to be frank with you. Obamacare it’s going to be tough except for maybe one or two votes in the Senate, Senator Manchin from West Virginia and that’s a little tougher because Obamacare is such a holy document in the Democratic party, it’s tough to go against that.”

Varney then noted that a lot of investors don’t want to know about the nitty gritty and parliamentary rules, they just want to know if we’re going to get Health Care and Tax Reform.

“Yes I think it’s better than 50-50 on Health Care for sure and I think it’s 100% on tax reform, I really do. I think that the House already kind of has their plan in the event that the Republican plan in the Senate doesn’t go down. They will get a tax reform bill. It may be slimmed down, but it’s going to have a lot of things that investors want and there is no way the Republicans can move into 2018 without a tax reform bill and Health Care may get very, very messy but on the tax reform that’s a done deal even if it’s slimmed down.”

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