Republican Senators Strive for Unity on Health Care Bill

After coming within one vote of total failure today, Senate Majority Leader Mitch McConnell (R-KY) was able to rally Republicans to at least allow a floor debate over altering the Affordable Care Act. Until ailing Sen. John McCain (R-AZ) announced late yesterday he would return to Washington sooner than expected, after being diagnosed with brain cancer, to participate in the procedural vote, it looked like the Senate would break for August recess without even considering some sort of GOP Obamacare repeal or replacement plan.

But even though the one-time Republican presidential nominee provided McConnell the much-needed momentum that for months had eluded him, it is entirely unclear whether enough support exists to get any sort of repeal bill through the Senate, let alone a comprehensive package. Continue reading “Republican Senators Strive for Unity on Health Care Bill”

Congress Rebukes White House on Russia Sanctions

Congress will send a strong message to Donald Trump Tuesday, when the House of Representatives is expected to approve a new package of Russia sanctions: Try easing penalties on Moscow, and you’ll have to answer to us. 

The bill, part of a broader deal that also includes new sanctions on Iran and North Korea, nearly came up short. After breezing through the Senate on a 98-2 vote, it encountered a swarm of opposition in the House.

Continue reading “Congress Rebukes White House on Russia Sanctions”

After Health Care, Congressional Republicans Pivot to Tax Reform

While Senate Republicans torpedo the GOP’s latest attempt at unraveling President Obama’s signature health care law, House Republican budget writers are trying to keep the party on track to deliver its other top agenda item: Tax reform.

House Budget Committee Chairwoman Diane Black (R-TN) yesterday unveiled her first fiscal blueprint as head of the panel once led by House Speaker Paul Ryan (R-WI). In addition to spelling out the party’s spending priorities, Republicans plan to use the budget resolution as a vehicle for overhauling the tax code. Senate Republicans can advance legislation on simple-majority votes — and avoid potential Democratic filibusters — only if they use the procedural workaround known as budget reconciliation. And they need an approved budget resolution before they can invoke reconciliation to pass a tax bill. Continue reading “After Health Care, Congressional Republicans Pivot to Tax Reform”

Broadband Providers are Gearing Up to Profit from Relaxed Web Rules

Fierce competition in mobile broadband. A steady decline in cable subscribers. New technology that drives down data prices. Hugely expensive infrastructure costs. An uncertain road to next-generation 5G wireless.

Those are just some of the challenges wired and wireless broadband providers are facing. Now those telecom firms are breathing a sigh of relief and gearing up to launch new services and enter new markets in a big way. Regulatory rollbacks will benefit web providers. But the path forward won’t be easy. Continue reading “Broadband Providers are Gearing Up to Profit from Relaxed Web Rules”

From Russia With Love: New Revelations Once Again Put White House on the Defensive

Russia has historically been the downfall of many promising political careers.  Napoleon was on a roll until he decided to invade the country in 1812, when a brutal Russian winter froze his formidable army in its tracks. In America after World War II, the Red Scare ensnared many prominent figures who had once had Soviet sympathies, most notably Alger Hiss, a well-respected diplomat who was tried as a Russian spy (and eventually convicted of perjury).

Donald Trump may be next. No matter how hard the president tries, he can’t seem to shake allegations that members of his campaign colluded with Russia during the 2016 presidential campaign.  

Continue reading “From Russia With Love: New Revelations Once Again Put White House on the Defensive”

Senate Republicans Double Down on Health Care Reform

Senate Republicans are no closer to reaching consensus on a health care bill than they were before they broke for the Fourth of July recess 13 days ago. However, they’re still plugging away, determined to get this done one way or another.

Senate Majority Leader Mitch McConnell, R-Ky., said Tuesday that he will release a revised package Thursday morning and hinted at a possible floor vote next week. The nonpartisan Congressional Budget Office is expected to analyze the plan’s fiscal impact sometime early next week. But eye McConnell’s renewed push warily. Continue reading “Senate Republicans Double Down on Health Care Reform”

The Odd Couple: Trump and Putin Finally Meet

The long-awaited first meeting between President Trump and his Russian counterpart Vladimir Putin is finally happening Friday at the G-20 Summit in Hamburg, Germany.

It couldn’t come at a stranger time in U.S.-Russian relations. Trump, who came into office seeking a reset with America’s implacable geopolitical adversary, is under pressure at home thanks to an investigation into alleged ties between the Kremlin and his 2016 presidential campaign. Continue reading “The Odd Couple: Trump and Putin Finally Meet”

Nightmare on the Korean Peninsula: Pyongyang Gets an ICBM

Tuesday was the Fourth of July. And while many Americans celebrated the holiday in usual pyrotechnic fashion, it was North Korea that produced the day’s biggest fireworks.

Indeed, Pyongyang chose America’s Independence Day to launch its first successful intercontinental ballistic missile, a major development that came sooner than expected and put the world’s most infamous rogue state one step closer to targeting the U.S. with a nuclear weapon.  Continue reading “Nightmare on the Korean Peninsula: Pyongyang Gets an ICBM”

Do Oil Prices Have Room To Fall Further?

Folks hitting the road for July 4th this year won’t have much to complain about at the gas pump.  The day before the holiday, AAA reports that regular unleaded averages a mere $2.23 per gallon nationwide: The lowest price for early July since 2005. (Of course, that nationwide average includes some sharp regional variations. Californians are paying roughly $2.94 per gallon of regular. In South Carolina, the statewide norm is $1.90.) It’s hard to believe that just three years ago, the nationwide average price was $3.68 per gallon.

Of course, drivers can thank the oil market for those savings. The world has been awash in excess crude for more than two years now, and oil prices have plunged during that time. Even with OPEC limiting its oil exports to shrink the supply glut, prices have remained stubbornly low. Benchmark West Texas Intermediate showed some signs of rallying this spring, but topped out at about $53 per barrel in April before retreating below $50 again. In fact, WTI technically entered a bear market when it closed at $42.53 on June 21, marking a 20% decline from its April peak. (A small rebound has taken crude back to about $46.50.)

Now, investors are starting to worry that oil’s slide could cause serious financial pain, both for the energy industry and for the broader stock market. The oil industry is a major employer as well as a huge customer for manufactured goods. Swooning crude prices could jeopardize the surge in drilling activity, weighing on sales of everything from steel pipe to pump jacks.

So, just where are oil prices going?

A few weeks ago, when WTI was sliding, I checked in with Stephen Schork, editor of energy investing newsletter The Schork Report, to ask that very question. WTI was hovering around $45 per barrel, and he warned that oil bulls faced a “do or die” moment. If prices didn’t soon stabilize, WTI could fall below $40: A damaging decline for an industry already battered by low prices. His reasoning: Oil demand is bound to slip when summer turns to fall and Americans wrap up their summer road trips. So, the market will be vulnerable to a sharp downturn if prices are already weakening at the start of summer, when demand is robust.

Crude prices did slip further after our conversation, but only briefly before rebounding to the mid-$40s. And there are some signs that the worst could be over. U.S. gasoline demand is looking especially strong so far. In fact, the final week of May saw an all-time high for gas consumption of slightly more than 9.8 million barrels per day.

Meanwhile, energy firms might finally be slowing down their frantic pace of drilling new wells. Oilfield services company Baker Hughes’ closely watched “Rig Count” showed two fewer oil rigs operating last week than the week before: A rare decline after a steady string of increases going back to last year. Odds are that U.S. oil production will keep rising because so many new wells have recently been drilled, and because producers are coaxing more crude from each new well. But the flood of new oil coming from Texas, Oklahoma and other states might slow to more of a trickle if drilling activity moderates.

OPEC remains a wildcard for oil markets. So far, the cartel has been remarkably disciplined in sticking to its production quota. But that hasn’t reduced global oil supplies enough to raise prices yet, in large part because OPEC members Libya and Nigeria are exempt from the agreement. Both have managed to ramp up exports recently. In fact, the International Energy Agency reports that OPEC’s collective production hit a monthly high in May because of rising output in those two countries. Cutbacks by Saudi Arabia and other members don’t do much to rein in excess supply if their cuts are offset elsewhere.

My best guess is that oil prices are unlikely to rally much, but aren’t yet in danger of falling off a cliff, either. The global supply glut won’t disappear quickly. But there are reasons to believe it won’t worsen. And demand is chugging along at a healthy clip. Given all of that, I look for WTI to trade somewhere in the low- to mid-$40s per barrel in September, fairly close to today. Of course, there will be some short-term spikes and dips between now and then as market volatility remains elevated.

Oil producers won’t have much to celebrate if I’m correct in my price outlook. But most won’t be going belly-up, either. And drivers will continue to enjoy fill-ups that are relatively pain-free.