You got to know when to hold 'em, know when to fold 'em,
Know when to walk away, know when to run.
You never count your money when you're sitting at the table,
There'll be time enough for counting when the dealings done.
-The Gambler- Kenny Rogers.
President Obama is going all in on the health care plan.
He postponed an overseas trip to be on hand for a hoped for vote on the plan this coming Friday. Democratic leaders have yet to secure the votes necessary to pass the Senate version of the health care bill. The House will actually be required to pass the Senate version and the yet to be seen "reconciliation" bill that will address the differences between the Senate and House version. If the House passes the Senate bill, the President would most probably sign it into law. The Senate Parliamentarian ruled a reconciliation bill has to "make changes in law", not changes in proposed law. The reconciliation bill would only then be taken up by both Houses of Congress. So the House is being called upon to pass a bill that will become law and take it on good faith that a separate bill will satisfy their issues.
Winning over a block of anti-abortion Democrats is probably the most significant hurdle to passage by the House.
As many as twelve Democrats led by Rep. Bart Stupak (D., Mich.) could withhold their aye vote if the bill "doesn't contain stronger restrictions than the Senate bill offers for abortion coverage in insurance policies that could be bought using Federal subsidies" (NY Times, Saturday March 13).
One option would be to tighten the abortion language in a later bill since reconciliation is supposed to deal only with budgetary matters and abortion language shouldn't qualify for this reconciliation bill. But some anti-abortion Democrats are ruling that out. Rep. Daniel Lipinsky (D. Ill.) voted for the House version in November. But he has since said "I am not going to trust it (a new bill) is going to pass the House and Senate after the original bill passes."
He trusts the Congress as much as the rest of America does!
David Brooks of the NY Times was on NBC's "Meet the Press" Sunday with Tom Friedman and Tom Brokaw. Brooks feels the President is acting like a "riverboat gambler" betting his Presidency on a bill that has a 50/50 chance of passage. While health care coverage would be a "moral accomplishment" for the administration, Brooks worries about the cost and the way they arrived at their estimates. He seemed particularly annoyed at the counting of ten years of revenues and only six years of cost that has been much discussed in the press recently.
Tom Friedman, one of the most even handed commentators and writers around today in my opinion, acknowledges the President is throwing a long bomb in the hopes of a touchdown. He's concerned about the rest of the Obama Presidency if it fails. In other words, I guess, what does the riverboat gambler due for the rest of a three year cruise when he's out of chips?
Tom Brokaw, who along with Morgan Freeman and Sean Connery has one of the best English speaking voices in the world today, was a fair and level moderator who said as a citizen he worries about the cost of the program. He feels the health plan has the DNA of the Homeland Security Act in that we don't know what will happen until it's out there. Maybe that's what Speaker Pelosi meant when she said last week "We have to pass the health care bill to find out what's in it."
Along with the vote (if it happens), Industrial Production, Housing Starts, a FOMC statement (look for no change to the language), PPI data, and CPI data are all being reported this week. The market liked the surprise uptick in February retail sales last week. The .3% gain in sales shows last month's snowstorms did little to slow the consumer. Sales ex autos and gasoline jumped .9% which is the largest increase since January of 2008. The three months into February showed retail sales growing at an annual rate of almost 7%. I wouldn't take this all to the bank as irrefutable evidence consumer spending is hale and hearty. Initial unemployment claims seem stubbornly high and gas is back towards $3.00. Let's wait and see and since consumer spending is 70% or so of our economy a lot rides on how it develops.
Vincent Farrell, Jr. is chief investment officer at Soleil Securities Group and a regular contributor to CNBC.