Senate GOP clears key tax obstacle;
November 30, 2017
EPA to hold biofuels quota steady; Global trade steams ahead in uncertain geopolitics; Price pressures strengthen case for rate hike.
- Senate GOP clears key tax obstacle. On a party line vote, the Senate voted to move to formal debate on the GOP’s tax legislation, a so called “must win” for Republicans ahead of the 2018 midterms. After the house passed its own version of tax reform earlier in November, the Senate is gearing up to hammer out several key sticking points in the bill, including deficit spending, corporate tax rates, the treatment of “pass-through” entities, and the repeal of the individual mandate. A number of swing vote Republicans, including John McCain and Lisa Murkowski, have pledged their support for the bill. The President has urged Republicans to finalize and vote on the controversial legislation by Christmas. [Politico]
- EPA to hold biofuels quota steady. The EPA’s 2018 standards for the amount of biofuels that refiners have to mix into the gasoline and diesel supply will remain consistent with previous years’ standards. The rule requires refiners to mix 19.29 billion gallons of renewable fuels into the supply, below the targets established by Congress, but in keeping with previous years. Biofuel (ethanol) producers have long lobbied for higher blending targets, while oil and gas companies encourage the opposite. The administration was rumored to be considering reducing this number, but after Midwestern Republicans threatened to uphold the nomination of William Wehrum to the EPA’s air and radiation office, the agency relented, leaving the rule intact. [The Hill]
Economic Indicators & News
- Global trade steams ahead in uncertain geopolitics. The International Monetary Fund is projecting a 4.2% increase in the volume of trade in goods and services. That figure was just 2.4% last year. Countries where trade gains were concentrated included South Korea, Germany and China. Booming international trade comes at a time when global politics, in countries like the US and the UK, have taken on a decidedly anti-trade flavor. The contradictions remain ahead of WTO meetings in Argentina next month- where global growth and trade growth contrast with protectionist political messages. [Bloomberg]
- Price pressures strengthen case for rate hike. The Federal Reserve’s Beige Book economy report, which collects anecdotal information from regional Fed banks, reported an improvement in business outlook. This data follows a Wednesday Commerce Department report that the economy expanded an annualized 3.3% the third quarter, ahead of estimates of 3%. Businesses reported that their biggest difficulty was finding qualified workers, and that price pressures have strengthened for inputs like construction materials and services like IT. The report, despite continually lagging inflation, likely builds an increasingly strong case for a Federal Reserve rate hike come December. [Bloomberg]