Obama Administration Blocks Offshore Drilling, Strengthens ObamaCare Marketplace
December 20, 2016
Obama Administration to block offshore drilling on parts of the Atlantic and Arctic; Federal government issues new rules to strengthen ObamaCare insurance marketplace; Dollar rises to 14-year peak on Tuesday, stock exchanges hit record highs.
- Obama Administration to block offshore drilling on parts of the Atlantic and Arctic. President Obama is planning to block offshore oil and natural gas drilling in many parts of the U.S. Arctic and Atlantic. Obama will use a provision in the 1953 Outer Continental Shelf Lands Act withdraw U.S. waters from future oil and gas leasing and implement the protections. Until now, the law has been used sparingly in order to preserve coral reefs, walrus feeding grounds and marine sanctuaries. It’s unclear, however, how large Obama’s protected areas will be. Last month, Obama finalized a plan for offshore drilling lease sales from 2017 to 2022 that excludes the Atlantic and Arctic. The United States’ portion of the Arctic is estimated to have 27 billion barrels of oil and 132 cubic feet of natural gas. The Atlantic has not had testing for oil and gas with modern technology. Currently, the United States’ offshore drilling industry is based almost entirely in the Gulf of Mexico with limited production off the coast of California. As of now, the Atlantic does not have any offshore drilling. [The Hill, Bloomberg]
- Federal government issues new rules to strengthen ObamaCare insurance marketplace. The Obama administration announced new rules to improve the ObamaCare insurance marketplace for next year, seeking to address lingering issues even as Republicans plans to repeal the law. The final regulation for 2018 seeks to improve the marketplace for insurers, who have complained about the operation of the marketplace and in some cases, dropped out and limiting coverage for patients in some areas. The regulation makes changes to the formula used to calculate payments to insurers under a program called risk adjustment, which intends to shield insurers against financial losses form high-cost enrollees. The action comes after the administration launched a pilot program to require documentation to ensure that people signing up for ObamaCare’s extra signup periods actually qualify, as insurers have complained that sick people are driving up costs and gaming the system by signing up during these extra periods. [The Hill]
Economic Indicators & News
- Dollar rises to 14-year peak on Tuesday, stock exchanges hit record highs. The dollar hit a 14-year-peak on Tuesday as the yen value depreciated after the Bank of Japan announced that it would stick to its loose monetary policy. U.S. stock indexes also reached record highs driven by a rally in riskier assets. U.S. stock have rallied since the election, with the S&P 500 increasing nearly 6 percent on bets that President-elect Trump’s plans to deregulate and increase infrastructure spending. Positive comments on Monday from Federal Reserve Chair Janet Yellen on the U.S. labor market also boosted the dollar, which rose almost half a percent against a basket of major currencies to 103.65 .DXY, the highest level since December 2002. Benchmark 10-year U.S. government bond yields, which set the standard for borrowing costs, rose to slightly above 2.58 percent. [Reuters]