Inflation Vexes Central Banks as Republicans Start Bipartisan Health Work
August 04, 2017
The GOP has moved the debate over the future of healthcare back to the committees, increasing hope that they will return to bipartisanship. Republican governors are also working to reform healthcare within their states. Jobless claims have continued to fall as the labor market tightens, but despite this, inflation continues to stagnate.
- Finance Committee to hold healthcare hearings. After the GOP’s failure to meet campaign promises of “repealing and replacing Obamacare” last week, Senate Finance Committee Chairman Orrin Hatch (R-Utah) has announced that the committee will hold hearings on healthcare, an indication of Senate Republicans are returning to the committee process and the potential for bipartisan contribution in reforming the law. He also indicated the committee’s main priority would be tax reform, but this move comes as a welcome sign for Democrats frustrated by the multiple unilateral attempts at repeal. [The Hill]
- GOP Governors consider Medicaid reform, cuts. Six GOP governors in Arkansas, Kentucky, Arizona, Maine, and Wisconsin are considering making dramatic adjustments to their eligibility requirements for Medicaid, rules which would likely serve to decrease total enrollment. Rules under consideration include; a work requirement, a 4-year eligibility limit, drug testing, etc. States could have the authority to do this if their requests to waive federal Medicaid requirements are approved by HHS, led by Secretary Tom Price, a vocal Obamacare opponent. While these waivers were typically used in the Obama era to expand coverage, Secretary Price has broad authority to release states from their requirements, and changes could come within weeks. [The Hill]]
Economic Indicators & News
- U.S. Jobless claims lower as labor market tightens. The number of Americans applying for unemployment benefits, an indicator of unemployment and the tightness of the labor market, continues to fall. This is the 126th week in a row of claims below 300,000, considered the threshold of a healthy economy. At an unemployment rate of 4.4%, the labor market is considered near full employment—despite the notable lack of higher wages and inflation. [Reuters]
- Global inflation at Lowest Level since Recession. G-20 countries’ inflation rates fell to their lowest levels in almost 8 years in June, complicating matters as central banks consider removing crisis response stimulus measures. Developed economies have been consistently unable to meet inflation targets, a mystery perplexing banks considering a rate hike. While inflation is typically correlated with a growing economy and rising prices, the opposite has been happening during the economic recovery. Central banks are hesitantly moving ahead with rate hikes or considering them, including the Fed, the ECB, the Bank of England, and the Bank of Canada. [WSJ]