Revised GOP Bill Looking More Like Obamacare, Nisen Says

But really the most important thing, uh, that many in the market are watching is the healthcare bill that the GOP has been working on, and Senate Republican leaders did present a revised healthcare plan today to try to gin up enough support to get it past in the near terms.

To take a look at how it differs from previous incarnations of this legislation, and I want to bring in Max Neeson, Bloomberg gad Fly columnist, fabulous columnist, Reada's columns, Bloomberg dot Com, slash gadfly or on the terminal, uh, he joins us. Now, so, Max, how is this new bill different from the old ones? And what does this tell us about the direction that it's going in, so

we we don't yet have a full bill. We're kind of working off a leaked outline UM that that seems to have come from globbyists, So we'll have to kind of dig into the bill text to get really all the details. But what it looks like so far are are a few major changes. Keeps some a c AT taxes on the wealthy in order to spend more on

helping states cover people's out of pocket costs. UM, helps with the tax treatment of health savings accounts, spending on the opioid crisis, lowering premiums UM actually some programs that Republicans have criticized that were part of the affordable character in the first place. UM, and also in covering some higher skin divid jewels UM. But it keeps Medicaid cuts just about the same, which which might be an area

of trouble. And the thing we really still don't know is to what degree UH ted cruz IDEA for basically letting people buy less generous health coverage than the a c A would have allowed. UM. We don't know how much of that's going to be included yet, But does this give us any indication of which direction it's moving in and sort of which factions are gaining the most

cloud in these negotiations. So the kind of interesting thing here is that it's it's this sort of bizarre compromise where everyone gets a little and we're not exactly sure how much everyone gets. Um So I think that's what might give it a little bit of difficult even though they're kind of shifting things around to kind of meet that fifty vote margin. I mean, it's not a good sign that, you know, there they didn't do anything to ameliorate the Medicaid cuts when that's a huge issue for

a lot of the potential moderate no votes. Conservatives might be angry that this basically rose a lot of money at some of the issues in it, which is just a general kind of ideological point that they don't agree with, and they might not get that kind of cruisily amendment in the version that they wanted. And the fact that Lindsay Graham and Bill Cassidy went on TV a few minutes before the Republicans were set to have a meeting about this bill and pitch their own alternative to this bill.

So it's kind of still everything is still up in the area. Um. I just guess I'm trying to just absorb the concept that we're basically watching the horse trading in real time? Is that is that kind of where I mean, that's just seems so otherworldly, but I guess

that's the way it goes, right, It's absolutely accurate. And um, it's kind of been the case the entire lifespan of this bill, both in the House and the Senate, and and it's just seems to be particularly active horse trading right now, where um, not only do you know, senators don't know what's going to be in the bill that's going to be possibly released to this day, and they're doing it to themselves right because it's it was about ten GOP senators that we're holding up the works, and

then they you know, they were horse trading. For example, I remember Susan Collins, I believe Maine Republican from Maine, uh wanted more money for the opioid crisis in May. Yes, so there was a lot of different senators that wanted that particular bit. But yeah, it's when you have a small group of people writing something a process that's not

that transparent. Um, you know, you you kind of see the reason that they did that is they're trying to move quickly to kind of move forward their legislative agenda. But it's sort of backfired because when you don't have an open process, you have people to get surprised, and then you know, they come out with demands and then you have to make these last minute little shifts. And with something is complicated as as healthcare legislation, you obviously

run into some issues. You know. I was looking at some polls recently about the general favorability ratings of the A c A and how it's actually gone up pretty substantially over the past few months. UM, And I'm wondering

whether that will complicate things. The fact that there is greater favorability feeling towards the current system then there has been in the past were complicate things if UH senators do go on recess and do go back to their districts and end up having conversations with people who suddenly have have a better feeling about this. And by the way, we're getting a redhead right now, we're getting a headline center Republicans have released the updated draft the healthcare bill.

So I am sure that MAXI will go back to your seat and scrutinize every passage. But you know what I'm saying, though, right and your day was just you and your evening, I would imagine evening. But it's already complicating things. I mean, people are looking ahead to and over kind of lifespan of the bill. It's moved kind of ever closer to the A C. A it's not.

You know that this is much closer to the A C than what the housepell was, particularly when you look at how the like subsidies and tax credits are structured. So the other the other thing that people are really watching is whether there is any cohesion among the Republican senators, uh, and whether there has been any kind of melding of minds. I mean, you talk about, you know, Senator Graham releasing his own healthcare bill before going into a meeting to

talk about the ongoing negotiations. But I wonder, you know, just from a market perspective, what people are looking for is what does this mean about fiscal stimulus, about other sort of market friendly activities in a tax bill. Um, Are we getting any sense that there is some kind of consensus building among the Republican factions or is it splintering further. You know, you know, if anything, it's the opposite.

And I think what revealed that the most was the fact that after they pulled the initial version of the Senate bill they were going to vote on it, they decided not to. Um, just a whole bunch of senators jumped out of the woodwork and said, I'm definitely not going to vote for this, even people that previously had been counted as pretty votes. You know, on one hand, you have to discount that a little bit, because you know,

the bill was dead in its current form. It's not like they were taking a vote or a major stand. But it also indicates that that pretty clearly there um some fractions, some divisions. People aren't willing to just fall in line up behind leadership because they said this is what we need to do. I just wanna veer you off course from the health bill because I know you're going to spend the rest of your day doing that. But just about about this cancer breakthrough, I mean, this

is something Can you just explain it what we've learned? Yeah? Absolutely, And I have a column coming out later today on this, and it's actually really a pretty stunning treatment. Basically, what they do is for a group of patients that um, you know, really have failed other treatments and would likely

die without it. What they're able to do is take out their imman cells, modify them, and inject them back into the body of people with the really serious blood cancer and in some patients that can very literally wipe out that cancer. Um, it's really quite amazing. Sing. The question is whether it's commercially viable. Um. You know, it has to be made specifically for each patient. It's likely to cost many hundreds of thousands of dollars um. You know,

it's it's unprecedented in that way as well. So it's gonna be really fascinating to fall over the next couple of years. And we're gonna want to read your column about this because I know you're gonna give us details, tell us about who did it in the companies and

so on. Thank you very much, Max Needson, Gadfly columnists Time Pim Fox along with Lisa Abramowitz and a very extensive bit of questioning Lisa Abramowitz and I thought very appropriate at the end when a chair Yellen was asked would she accept an appointment, you know, to be reappointed, and there was that pause just beforehand and a couple of very pointed questions. Everyone wanted her to basically weigh in on this, and Carl Kadana, who is chief US economist,

we're gonna let him in on this. Well, you know he was. He was making the argument yesterday to us off air that this would be the time for her to actually make a statement about whether or not she think you only, yeah, we kind of bet that here so he can weigh in on the surprise I got because Carl is hardly ever wrong. However, yeah, Carlon knows. So the terms of the bet were a cup of coffee, right, that's right, So I'll meet you downstairs for a cup

of coffee. Yea perfect um. No, This, in contrast to the post meeting statements and press conferences, uh now, would have been a yeah. I think a good time for her to show her hand. Obviously, fed continuity is so critical at this point, and there's basically six months left in her terms, so I think that before Gary Cohne takes over, well before her term expires, will say on February three. Uh, and so you know it's important at

some point, you can't don February two. Finally, reveal your intentions, especially with such high stakes right now, do you say never? You said you can never say never? You never say never. It would be I'll say it would be a bad

idea to wait until the last right. We need to know what course the Feds on with the balance sheet with interest rates, uh you know, keeping markets as calm as possible as they tried to normalize policy in an economy that's uh performing so so uh so the Fed wants to be transparent, don't save a big surprise for the last minute at some point, And she didn't have to do it today, but the clock is ticking and

it will soon be appropriate for her to express her intentions, Carl. Yesterday, the market was interpreting Janet Allen's statements as being dovish. Is being a sort of conducive to an ongoing rally and risk assets as well as an ongoing rally and government at everything is great. The world is in the goldilocks area today it's different. Today. We're seeing somewhat of

a sell off in von Marcus. Is this people basically taking a step back and saying she really hasn't made any material changes or is this not related to her testimony at all. I don't think today's move is too heavily related to her testimony. I think the market interpretation yesterday that she was sounding more dovish, incrementally more dovish h than she did at the June meeting press conference. I think that was a correct interpretation. And the Fed

is UH being more ponderous about potential disinflation threats. I yeah, earlier today looked back to what see what the Fed's report card on the inflation mandate was over Cherry Yellen's term. UH, And if we go back to fourteen and look at either the PC deflator or the core PC deflator, basically

they have missed the entire time. There was one month during Janet Yellen's FED term as chair where the headline PC deflator, which is the objective they're trying to not hit two percent with, actually was at two percent or better. The rest of the term they have missed. In fact, if we go back and look from two thousand and nine to present, UH, the FED has missed the two percent inflation mandate on the court inflator percent of the

time you look at the headline, it's eight percent. You know, if carbon Kadana were an economic was an economics professor, and he could certainly be. He would never let anybody slide, not even a little. He is he you hold their feet to the great high. Can I just point out something though, that if you take a look at what's going on in equity markets right now. I know you're worried about your bonds, but you know you had that big sell off a couple of weeks ago. I marked

that because that's when you leave, you leave whenever. That's the best indicators when you leave the bond market tanks. And then we've seen this run up, and now we've seen yields kind of back up a little bit because everyone went, oh, Okay, maybe maybe we're not going to get this raise right because she's delish. Take a look at stocks today. Stocks are up very very little, but

they're up. And that's very important because that's what they I believe it has to do with what's called an inside day, because it has to do with a lot of market technicals that have to do that demonstrate buying and selling, strength and pressure. And the couple with your point about emerging market debt, which chair Yellin spoke about, or said she spoke about um. I want to know Lisa Brownwoods from you. There were a couple of questions there about the financial crisis that brought up the words

Bear Stearns and Lehman Brothers. I mean, come on, of course there is and you've got the Financial Committee, but there was anything they're going to bring up the crisis. And then they talked about glass Stiegel and they asked about the reinstatement with a possible reinstatement of glass Steel. And I'm wondering what you thought, because it's almost as if are yelling came back and said, yes, it was that there was a long pause before she answered that question.

You know, honestly, I think that it's it's nice to pontificate on on that particular thing. I think it doesn't really matter though, to be honest, I mean, it's sort of like that. It's nice. They're they're basically grandstanding, right, And I think that as far as the senators, the senators, and she's trying to respond in a way that's the

least destructive as possible. Carl, I mean, but that's what well, Carl, I mean, you've even that's one of the that goes to the heart of what you're saying, which is that the presentation to the audience that may maybe not matter more, but matter as much, which is the financial community and the people who have to live and breathe all this stuff that they need more than just what leases describing as kind of this what did you say a grand Uh.

She's not trying to deliver soundbites here, so she's not going to say, yes, bring back last Stiegel, So she instead gives a very crap the answer that the meanders around and talks about regulations on banking and uh, preventing the next financial crisis and whatnot. But back to the original point on because and what you're highlighting here is this focus on financial stability risks, which is one of

the moting motivating factors for the FED. Uh. My. My contrary point is that they have missed on core inflation of the time uh since the Great Recession. Uh. Now you have inflation backsliding at the same time that the FED is ramping up the pace of tightening. It's very hard. The FED is very sensitive to its inflation credibility. Uh, and I think that they risk seeding some of that

credibility if inflation is backsliding. You've been below target of the time, and now you're accelerating the pace of tightening. So if you want to say there's symmetric uh, you know, a symmetric focus on that two percent inflation target and you've missed. Yeah. The other student in the class, Lisa Bromwitz, has a question, sure, real quick. I think that underlying all of her testimony was who is going to be

her successor? We've gotten some names, including Gary Cohne, who I somewhat flippantly mentioned before, former chief operating officer of Woman Sex. Who do you think is the most likely next fight chair? Well, I mean the fact that we're hearing Gary Cohn's name so much, I think means that that could be he could be a prime candidate. I think also New York Fed President Bill Dudley that could be a potential candidate. He would be yelling too, so

to speak, because he does have a devish policy inclination. Uh. It could be someone from the current Board of Governors, but it just I don't say any names jumping out at that point. So you have to be on the Board of Governors to be chair. So that would mean President Dudley would have to be appointed into one of the governor's seats. So there seems to be this game of chicken with yelling at exactly. Rickadonna, thank you so much for joining us. Actually important always to get your

insights at Carcadona's chief US economist for Bloomberg Intelligence. Thanks for listening to the Bloomberg P and L podcast. You can subscribe and listen to interviews at Apple Podcasts, SoundCloud, or whatever podcast platform you prefer. I'm pim Fox. I'm on Twitter at pim Fox. I'm on Twitter at Lisa Abramo. It's one before the podcast. You can always catch us worldwide on Bloomberg Radio