— This is the script of CNBC's news report for China's CCTV on September 27, Wednesday.
Senate Republicans have given up the latest health bill vote and it is because of the differences within the Republican Party, resulting in the lack of votes to be passed in the Senate. Let's take a look at the number of votes. We know that there are a total of 100 senators in the Senate, of which 52 seats belong to the Republican. Yesterday, we mentioned that any legislation requires at least 60 votes. That means other than all Republicans voting in favor, there is still a need for eight more Democrats to do so too. This is definitely more challenging therefore the reconciliation method is used to legislate the medical reform bill. Indeed, permitted to only be used once in a year, the reconciliation process would make it easier to legislate, as only 50 votes are needed to pass the bill.
However, Republican Senator Susan Collins said she would vote against the health care reform. Her vote, alongside the votes of two other Republicans, Senator John Mccain and Ryan Paul who also voted against, had caused the total number of Republican votes to drop to 49. With strong opposition from the Democratic Party, the healthcare reform bill was not passed in the Senate.
The divide within the Republican Party is due to how deficits would significantly increase by nearly $200 billion over the next decade if a subsidy policy under the Obamacare is put to an end, something that the Congressional Budget Office has pointed out last month. Previously on Obamacare, the scheme of "Cost-Sharing Reduction Payments, CSRs" where subsidies are paid directly by the government to healthcare providers help to reduce the amount of money that low-income groups have to pay. But if these subsidies in Obamacare are terminated, the insurance premiums of some groups will rise by 20% in 2018, which the federal government will then have to spend more to subsidize low-income groups. Therefore, with the healthcare vote being abandoned, it may mean that healthcare reform may be postponed to next year or even later.
[Chuck Schumer, U.S. Senate Minority Leader] "All in all even without specific numbers for estimates, the CBO report confirms much of what we already knew about graham-cassidy. Its a whole-sale dismantling of our healthcare system that would create chaos in many places, and cause millions to loose coverage, drive up costs and put healthcare out of the reach for the folks who need it most."
Currently, after yet another setback of the healthcare reform, Trump and various Republican lawmakers are now shifting their focus to tax reform and even plan to announce an outline of it on Wednesday. Some details of this outline have been revealed to the media. Apart from what we have discussed yesterday, corporate tax rate may be around 20%, the maximum personal tax is adjusted down from 39.6% to 35% and according to the latest news, the minimum personal income tax rate goes up from 10% to 12 %, while personal income tax brackets are reduced from seven to three. Standard tax deductions, including individuals and families, will double. These are all in line with what Trump has proposed during his presidential campaign. Indeed, after the setback of the healthcare reform, Trump hopes that the House of Representatives will pass the tax reform bill in October and afterwards, the Senate will approve it before the end of the year.
However, after multiple bill legislation failures by the Trump administration, the market is getting relatively negative. Overnight, the DJIA index fell again, becoming its fourth consecutive trading day decline.
[Todd Horwitz, Chief Strategist, BubbaTrading.com] "Nobody wants to, even his own party doesn't want to pass the legislation so here we are, we've got the full majority of the house, the majority of senate yet we can't get one real bill through, yes he's been able to do some executive orders. As far as passing anything, you can hear Paul Ryan talk, you can hear Bob Corker talk, everybody is talking about what we are going to do but in the meantime, when it comes to the voting, they are not gonna vote for it."
We will pay close attention to the concrete details of the tax plan and the reaction from the Democratic Party, on Wednesday, U.S time. CNBC's Qian Chen reporting from Singapore.