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Revised GOP Bill Looking More Like Obamacare, Nisen Says · Bloomberg Intelligence

• 0:05
  Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm Pim Fox.
• 0:08
  Speaker 1: Along with my co host Lisa Bramowitz. Each day we
• 0:11
  Speaker 1: bring you the most important, noteworthy, and useful interviews for
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  Speaker 1: you and your money, whether you're at the grocery store
• 0:17
  Speaker 1: or the trading floor. Find the Bloomberg p m L
• 0:20
  Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. Well,
• 0:32
  Speaker 1: you know, we talk a lot about some of the
• 0:33
  Speaker 1: political turmoil in Washington, from the Russia intrigue to everything else.
• 0:39
  Speaker 1: But really the most important thing, uh, that many in
• 0:42
  Speaker 1: the market are watching is the healthcare bill that the
• 0:44
  Speaker 1: GOP has been working on, and Senate Republican leaders did
• 0:48
  Speaker 1: present a revised healthcare plan today to try to gin
• 0:52
  Speaker 1: up enough support to get it past in the near terms.
• 0:55
  Speaker 1: To take a look at how it differs from previous
• 0:58
  Speaker 1: incarnations of this legislation, and I want to bring in
• 1:00
  Speaker 1: Max Neeson, Bloomberg gad Fly columnist, fabulous columnist, Reada's columns,
• 1:06
  Speaker 1: Bloomberg dot Com, slash gadfly or on the terminal, uh,
• 1:10
  Speaker 1: he joins us. Now, so, Max, how is this new
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  Speaker 1: bill different from the old ones? And what does this
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  Speaker 1: tell us about the direction that it's going in, so
• 1:20
  Speaker 1: we we don't yet have a full bill. We're kind
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  Speaker 1: of working off a leaked outline UM that that seems
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  Speaker 1: to have come from globbyists, So we'll have to kind
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  Speaker 1: of dig into the bill text to get really all
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  Speaker 1: the details. But what it looks like so far are
• 1:34
  Speaker 1: are a few major changes. Keeps some a c AT
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  Speaker 1: taxes on the wealthy in order to spend more on
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  Speaker 1: helping states cover people's out of pocket costs. UM, helps
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  Speaker 1: with the tax treatment of health savings accounts, spending on
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  Speaker 1: the opioid crisis, lowering premiums UM actually some programs that
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  Speaker 1: Republicans have criticized that were part of the affordable character
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  Speaker 1: in the first place. UM, and also in covering some
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  Speaker 1: higher skin divid jewels UM. But it keeps Medicaid cuts
• 2:03
  Speaker 1: just about the same, which which might be an area
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  Speaker 1: of trouble. And the thing we really still don't know
• 2:08
  Speaker 1: is to what degree UH ted cruz IDEA for basically
• 2:12
  Speaker 1: letting people buy less generous health coverage than the a
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  Speaker 1: c A would have allowed. UM. We don't know how
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  Speaker 1: much of that's going to be included yet, But does
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  Speaker 1: this give us any indication of which direction it's moving
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  Speaker 1: in and sort of which factions are gaining the most
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  Speaker 1: cloud in these negotiations. So the kind of interesting thing
• 2:32
  Speaker 1: here is that it's it's this sort of bizarre compromise
• 2:35
  Speaker 1: where everyone gets a little and we're not exactly sure
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  Speaker 1: how much everyone gets. Um So I think that's what
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  Speaker 1: might give it a little bit of difficult even though
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  Speaker 1: they're kind of shifting things around to kind of meet
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  Speaker 1: that fifty vote margin. I mean, it's not a good
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  Speaker 1: sign that, you know, there they didn't do anything to
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  Speaker 1: ameliorate the Medicaid cuts when that's a huge issue for
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  Speaker 1: a lot of the potential moderate no votes. Conservatives might
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  Speaker 1: be angry that this basically rose a lot of money
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  Speaker 1: at some of the issues in it, which is just
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  Speaker 1: a general kind of ideological point that they don't agree with,
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  Speaker 1: and they might not get that kind of cruisily amendment
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  Speaker 1: in the version that they wanted. And the fact that
• 3:11
  Speaker 1: Lindsay Graham and Bill Cassidy went on TV a few
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  Speaker 1: minutes before the Republicans were set to have a meeting
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  Speaker 1: about this bill and pitch their own alternative to this bill.
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  Speaker 1: So it's kind of still everything is still up in
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  Speaker 1: the area. Um. I just guess I'm trying to just
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  Speaker 1: absorb the concept that we're basically watching the horse trading
• 3:34
  Speaker 1: in real time? Is that is that kind of where
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  Speaker 1: I mean, that's just seems so otherworldly, but I guess
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  Speaker 1: that's the way it goes, right, It's absolutely accurate. And um,
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  Speaker 1: it's kind of been the case the entire lifespan of
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  Speaker 1: this bill, both in the House and the Senate, and
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  Speaker 1: and it's just seems to be particularly active horse trading
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  Speaker 1: right now, where um, not only do you know, senators
• 3:56
  Speaker 1: don't know what's going to be in the bill that's
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  Speaker 1: going to be possibly released to this day, and they're
• 4:01
  Speaker 1: doing it to themselves right because it's it was about
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  Speaker 1: ten GOP senators that we're holding up the works, and
• 4:07
  Speaker 1: then they you know, they were horse trading. For example,
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  Speaker 1: I remember Susan Collins, I believe Maine Republican from Maine,
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  Speaker 1: uh wanted more money for the opioid crisis in May. Yes,
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  Speaker 1: so there was a lot of different senators that wanted
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  Speaker 1: that particular bit. But yeah, it's when you have a
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  Speaker 1: small group of people writing something a process that's not
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  Speaker 1: that transparent. Um, you know, you you kind of see
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  Speaker 1: the reason that they did that is they're trying to
• 4:34
  Speaker 1: move quickly to kind of move forward their legislative agenda.
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  Speaker 1: But it's sort of backfired because when you don't have
• 4:39
  Speaker 1: an open process, you have people to get surprised, and
• 4:42
  Speaker 1: then you know, they come out with demands and then
• 4:45
  Speaker 1: you have to make these last minute little shifts. And
• 4:48
  Speaker 1: with something is complicated as as healthcare legislation, you obviously
• 4:52
  Speaker 1: run into some issues. You know. I was looking at
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  Speaker 1: some polls recently about the general favorability ratings of the
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  Speaker 1: A c A and how it's actually gone up pretty
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  Speaker 1: substantially over the past few months. UM, And I'm wondering
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  Speaker 1: whether that will complicate things. The fact that there is
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  Speaker 1: greater favorability feeling towards the current system then there has
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  Speaker 1: been in the past were complicate things if UH senators
• 5:22
  Speaker 1: do go on recess and do go back to their
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  Speaker 1: districts and end up having conversations with people who suddenly
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  Speaker 1: have have a better feeling about this. And by the way,
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  Speaker 1: we're getting a redhead right now, we're getting a headline
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  Speaker 1: center Republicans have released the updated draft the healthcare bill.
• 5:35
  Speaker 1: So I am sure that MAXI will go back to
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  Speaker 1: your seat and scrutinize every passage. But you know what
• 5:40
  Speaker 1: I'm saying, though, right and your day was just you
• 5:43
  Speaker 1: and your evening, I would imagine evening. But it's already
• 5:47
  Speaker 1: complicating things. I mean, people are looking ahead to and
• 5:53
  Speaker 1: over kind of lifespan of the bill. It's moved kind
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  Speaker 1: of ever closer to the A C. A it's not.
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  Speaker 1: You know that this is much closer to the A
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  Speaker 1: C than what the housepell was, particularly when you look
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  Speaker 1: at how the like subsidies and tax credits are structured.
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  Speaker 1: So the other the other thing that people are really
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  Speaker 1: watching is whether there is any cohesion among the Republican senators, uh,
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  Speaker 1: and whether there has been any kind of melding of minds.
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  Speaker 1: I mean, you talk about, you know, Senator Graham releasing
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  Speaker 1: his own healthcare bill before going into a meeting to
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  Speaker 1: talk about the ongoing negotiations. But I wonder, you know,
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  Speaker 1: just from a market perspective, what people are looking for
• 6:29
  Speaker 1: is what does this mean about fiscal stimulus, about other
• 6:31
  Speaker 1: sort of market friendly activities in a tax bill. Um,
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  Speaker 1: Are we getting any sense that there is some kind
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  Speaker 1: of consensus building among the Republican factions or is it
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  Speaker 1: splintering further. You know, you know, if anything, it's the opposite.
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  Speaker 1: And I think what revealed that the most was the
• 6:46
  Speaker 1: fact that after they pulled the initial version of the
• 6:49
  Speaker 1: Senate bill they were going to vote on it, they
• 6:50
  Speaker 1: decided not to. Um, just a whole bunch of senators
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  Speaker 1: jumped out of the woodwork and said, I'm definitely not
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  Speaker 1: going to vote for this, even people that previously had
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  Speaker 1: been counted as pretty votes. You know, on one hand,
• 7:01
  Speaker 1: you have to discount that a little bit, because you know,
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  Speaker 1: the bill was dead in its current form. It's not
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  Speaker 1: like they were taking a vote or a major stand.
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  Speaker 1: But it also indicates that that pretty clearly there um
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  Speaker 1: some fractions, some divisions. People aren't willing to just fall
• 7:15
  Speaker 1: in line up behind leadership because they said this is
• 7:18
  Speaker 1: what we need to do. I just wanna veer you
• 7:22
  Speaker 1: off course from the health bill because I know you're
• 7:24
  Speaker 1: going to spend the rest of your day doing that.
• 7:25
  Speaker 1: But just about about this cancer breakthrough, I mean, this
• 7:29
  Speaker 1: is something Can you just explain it what we've learned? Yeah? Absolutely,
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  Speaker 1: And I have a column coming out later today on this,
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  Speaker 1: and it's actually really a pretty stunning treatment. Basically, what
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  Speaker 1: they do is for a group of patients that um,
• 7:43
  Speaker 1: you know, really have failed other treatments and would likely
• 7:45
  Speaker 1: die without it. What they're able to do is take
• 7:48
  Speaker 1: out their imman cells, modify them, and inject them back
• 7:51
  Speaker 1: into the body of people with the really serious blood
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  Speaker 1: cancer and in some patients that can very literally wipe
• 7:57
  Speaker 1: out that cancer. Um, it's really quite amazing. Sing. The
• 8:00
  Speaker 1: question is whether it's commercially viable. Um. You know, it
• 8:04
  Speaker 1: has to be made specifically for each patient. It's likely
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  Speaker 1: to cost many hundreds of thousands of dollars um. You know,
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  Speaker 1: it's it's unprecedented in that way as well. So it's
• 8:13
  Speaker 1: gonna be really fascinating to fall over the next couple
• 8:15
  Speaker 1: of years. And we're gonna want to read your column
• 8:17
  Speaker 1: about this because I know you're gonna give us details,
• 8:18
  Speaker 1: tell us about who did it in the companies and
• 8:20
  Speaker 1: so on. Thank you very much, Max Needson, Gadfly columnists
• 8:36
  Speaker 1: Time Pim Fox along with Lisa Abramowitz and a very
• 8:40
  Speaker 1: extensive bit of questioning Lisa Abramowitz and I thought very
• 8:43
  Speaker 1: appropriate at the end when a chair Yellen was asked
• 8:46
  Speaker 1: would she accept an appointment, you know, to be reappointed,
• 8:51
  Speaker 1: and there was that pause just beforehand and a couple
• 8:55
  Speaker 1: of very pointed questions. Everyone wanted her to basically weigh
• 8:58
  Speaker 1: in on this, and Carl Kadana, who is chief US economist,
• 9:01
  Speaker 1: we're gonna let him in on this. Well, you know
• 9:04
  Speaker 1: he was. He was making the argument yesterday to us
• 9:07
  Speaker 1: off air that this would be the time for her
• 9:10
  Speaker 1: to actually make a statement about whether or not she
• 9:12
  Speaker 1: think you only, yeah, we kind of bet that here
• 9:17
  Speaker 1: so he can weigh in on the surprise I got
• 9:20
  Speaker 1: because Carl is hardly ever wrong. However, yeah, Carlon knows.
• 9:23
  Speaker 1: So the terms of the bet were a cup of coffee, right,
• 9:25
  Speaker 1: that's right, So I'll meet you downstairs for a cup
• 9:27
  Speaker 1: of coffee. Yea perfect um. No, This, in contrast to
• 9:33
  Speaker 1: the post meeting statements and press conferences, uh now, would
• 9:37
  Speaker 1: have been a yeah. I think a good time for
• 9:39
  Speaker 1: her to show her hand. Obviously, fed continuity is so
• 9:44
  Speaker 1: critical at this point, and there's basically six months left
• 9:49
  Speaker 1: in her terms, so I think that before Gary Cohne
• 9:52
  Speaker 1: takes over, well before her term expires, will say on
• 9:55
  Speaker 1: February three. Uh, and so you know it's important at
• 9:59
  Speaker 1: some point, you can't don February two. Finally, reveal your intentions,
• 10:03
  Speaker 1: especially with such high stakes right now, do you say never?
• 10:08
  Speaker 1: You said you can never say never? You never say never.
• 10:11
  Speaker 1: It would be I'll say it would be a bad
• 10:12
  Speaker 1: idea to wait until the last right. We need to
• 10:17
  Speaker 1: know what course the Feds on with the balance sheet
• 10:19
  Speaker 1: with interest rates, uh you know, keeping markets as calm
• 10:23
  Speaker 1: as possible as they tried to normalize policy in an
• 10:26
  Speaker 1: economy that's uh performing so so uh so the Fed
• 10:30
  Speaker 1: wants to be transparent, don't save a big surprise for
• 10:34
  Speaker 1: the last minute at some point, And she didn't have
• 10:37
  Speaker 1: to do it today, but the clock is ticking and
• 10:40
  Speaker 1: it will soon be appropriate for her to express her intentions, Carl. Yesterday,
• 10:45
  Speaker 1: the market was interpreting Janet Allen's statements as being dovish.
• 10:49
  Speaker 1: Is being a sort of conducive to an ongoing rally
• 10:53
  Speaker 1: and risk assets as well as an ongoing rally and
• 10:56
  Speaker 1: government at everything is great. The world is in the
• 10:59
  Speaker 1: goldilocks area today it's different. Today. We're seeing somewhat of
• 11:02
  Speaker 1: a sell off in von Marcus. Is this people basically
• 11:05
  Speaker 1: taking a step back and saying she really hasn't made
• 11:08
  Speaker 1: any material changes or is this not related to her
• 11:11
  Speaker 1: testimony at all. I don't think today's move is too
• 11:14
  Speaker 1: heavily related to her testimony. I think the market interpretation
• 11:18
  Speaker 1: yesterday that she was sounding more dovish, incrementally more dovish
• 11:23
  Speaker 1: h than she did at the June meeting press conference.
• 11:26
  Speaker 1: I think that was a correct interpretation. And the Fed
• 11:30
  Speaker 1: is UH being more ponderous about potential disinflation threats. I yeah,
• 11:36
  Speaker 1: earlier today looked back to what see what the Fed's
• 11:40
  Speaker 1: report card on the inflation mandate was over Cherry Yellen's term. UH,
• 11:47
  Speaker 1: And if we go back to fourteen and look at
• 11:49
  Speaker 1: either the PC deflator or the core PC deflator, basically
• 11:54
  Speaker 1: they have missed the entire time. There was one month
• 11:57
  Speaker 1: during Janet Yellen's FED term as chair where the headline
• 12:02
  Speaker 1: PC deflator, which is the objective they're trying to not
• 12:05
  Speaker 1: hit two percent with, actually was at two percent or better.
• 12:09
  Speaker 1: The rest of the term they have missed. In fact,
• 12:11
  Speaker 1: if we go back and look from two thousand and
• 12:13
  Speaker 1: nine to present, UH, the FED has missed the two
• 12:18
  Speaker 1: percent inflation mandate on the court inflator percent of the
• 12:23
  Speaker 1: time you look at the headline, it's eight percent. You know,
• 12:27
  Speaker 1: if carbon Kadana were an economic was an economics professor,
• 12:30
  Speaker 1: and he could certainly be. He would never let anybody slide,
• 12:34
  Speaker 1: not even a little. He is he you hold their
• 12:38
  Speaker 1: feet to the great high. Can I just point out
• 12:44
  Speaker 1: something though, that if you take a look at what's
• 12:46
  Speaker 1: going on in equity markets right now. I know you're
• 12:48
  Speaker 1: worried about your bonds, but you know you had that
• 12:51
  Speaker 1: big sell off a couple of weeks ago. I marked
• 12:53
  Speaker 1: that because that's when you leave, you leave whenever. That's
• 12:56
  Speaker 1: the best indicators when you leave the bond market tanks.
• 12:59
  Speaker 1: And then we've seen this run up, and now we've
• 13:01
  Speaker 1: seen yields kind of back up a little bit because
• 13:04
  Speaker 1: everyone went, oh, Okay, maybe maybe we're not going to
• 13:06
  Speaker 1: get this raise right because she's delish. Take a look
• 13:09
  Speaker 1: at stocks today. Stocks are up very very little, but
• 13:12
  Speaker 1: they're up. And that's very important because that's what they
• 13:14
  Speaker 1: I believe it has to do with what's called an
• 13:17
  Speaker 1: inside day, because it has to do with a lot
• 13:19
  Speaker 1: of market technicals that have to do that demonstrate buying
• 13:22
  Speaker 1: and selling, strength and pressure. And the couple with your
• 13:27
  Speaker 1: point about emerging market debt, which chair Yellin spoke about,
• 13:31
  Speaker 1: or said she spoke about um. I want to know
• 13:35
  Speaker 1: Lisa Brownwoods from you. There were a couple of questions
• 13:39
  Speaker 1: there about the financial crisis that brought up the words
• 13:41
  Speaker 1: Bear Stearns and Lehman Brothers. I mean, come on, of
• 13:44
  Speaker 1: course there is and you've got the Financial Committee, but
• 13:46
  Speaker 1: there was anything they're going to bring up the crisis.
• 13:48
  Speaker 1: And then they talked about glass Stiegel and they asked
• 13:51
  Speaker 1: about the reinstatement with a possible reinstatement of glass Steel.
• 13:55
  Speaker 1: And I'm wondering what you thought, because it's almost as
• 13:59
  Speaker 1: if are yelling came back and said, yes, it was
• 14:03
  Speaker 1: that there was a long pause before she answered that question.
• 14:07
  Speaker 1: You know, honestly, I think that it's it's nice to
• 14:09
  Speaker 1: pontificate on on that particular thing. I think it doesn't
• 14:12
  Speaker 1: really matter though, to be honest, I mean, it's sort
• 14:14
  Speaker 1: of like that. It's nice. They're they're basically grandstanding, right,
• 14:17
  Speaker 1: And I think that as far as the senators, the senators,
• 14:21
  Speaker 1: and she's trying to respond in a way that's the
• 14:23
  Speaker 1: least destructive as possible. Carl, I mean, but that's what well, Carl,
• 14:29
  Speaker 1: I mean, you've even that's one of the that goes
• 14:31
  Speaker 1: to the heart of what you're saying, which is that
• 14:33
  Speaker 1: the presentation to the audience that may maybe not matter more,
• 14:37
  Speaker 1: but matter as much, which is the financial community and
• 14:40
  Speaker 1: the people who have to live and breathe all this
• 14:42
  Speaker 1: stuff that they need more than just what leases describing
• 14:47
  Speaker 1: as kind of this what did you say a grand Uh.
• 14:51
  Speaker 1: She's not trying to deliver soundbites here, so she's not
• 14:54
  Speaker 1: going to say, yes, bring back last Stiegel, So she
• 14:57
  Speaker 1: instead gives a very crap the answer that the meanders
• 15:01
  Speaker 1: around and talks about regulations on banking and uh, preventing
• 15:06
  Speaker 1: the next financial crisis and whatnot. But back to the
• 15:09
  Speaker 1: original point on because and what you're highlighting here is
• 15:13
  Speaker 1: this focus on financial stability risks, which is one of
• 15:17
  Speaker 1: the moting motivating factors for the FED. Uh. My. My
• 15:20
  Speaker 1: contrary point is that they have missed on core inflation
• 15:26
  Speaker 1: of the time uh since the Great Recession. Uh. Now
• 15:29
  Speaker 1: you have inflation backsliding at the same time that the
• 15:32
  Speaker 1: FED is ramping up the pace of tightening. It's very hard.
• 15:36
  Speaker 1: The FED is very sensitive to its inflation credibility. Uh,
• 15:41
  Speaker 1: and I think that they risk seeding some of that
• 15:43
  Speaker 1: credibility if inflation is backsliding. You've been below target of
• 15:48
  Speaker 1: the time, and now you're accelerating the pace of tightening.
• 15:51
  Speaker 1: So if you want to say there's symmetric uh, you know,
• 15:54
  Speaker 1: a symmetric focus on that two percent inflation target and
• 15:57
  Speaker 1: you've missed. Yeah. The other student in the class, Lisa Bromwitz,
• 16:02
  Speaker 1: has a question, sure, real quick. I think that underlying
• 16:06
  Speaker 1: all of her testimony was who is going to be
• 16:08
  Speaker 1: her successor? We've gotten some names, including Gary Cohne, who
• 16:12
  Speaker 1: I somewhat flippantly mentioned before, former chief operating officer of
• 16:16
  Speaker 1: Woman Sex. Who do you think is the most likely
• 16:18
  Speaker 1: next fight chair? Well, I mean the fact that we're
• 16:21
  Speaker 1: hearing Gary Cohn's name so much, I think means that
• 16:24
  Speaker 1: that could be he could be a prime candidate. I
• 16:27
  Speaker 1: think also New York Fed President Bill Dudley that could
• 16:30
  Speaker 1: be a potential candidate. He would be yelling too, so
• 16:35
  Speaker 1: to speak, because he does have a devish policy inclination. Uh.
• 16:39
  Speaker 1: It could be someone from the current Board of Governors,
• 16:42
  Speaker 1: but it just I don't say any names jumping out
• 16:45
  Speaker 1: at that point. So you have to be on the
• 16:47
  Speaker 1: Board of Governors to be chair. So that would mean
• 16:49
  Speaker 1: President Dudley would have to be appointed into one of
• 16:51
  Speaker 1: the governor's seats. So there seems to be this game
• 16:55
  Speaker 1: of chicken with yelling at exactly. Rickadonna, thank you so
• 17:00
  Speaker 1: much for joining us. Actually important always to get your
• 17:03
  Speaker 1: insights at Carcadona's chief US economist for Bloomberg Intelligence. Thanks
• 17:10
  Speaker 1: for listening to the Bloomberg P and L podcast. You
• 17:12
  Speaker 1: can subscribe and listen to interviews at Apple Podcasts, SoundCloud,
• 17:16
  Speaker 1: or whatever podcast platform you prefer. I'm pim Fox. I'm
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  Speaker 1: on Twitter at pim Fox. I'm on Twitter at Lisa Abramo.
• 17:24
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• 17:27
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