numbers under current law the budget office estimates the government will bring in $41 trillion over the next decade but repealing obama care would have reduced numbers. you don't have to raise new taxes to make up the difference. that was basically a freebie. now that's a very different conversation than tax reform. # to keep it revenue neutral they'll have to offset any tax cuts with tax increases somewhere else. it's much easier to do that if you are trying to hit a goal of $40 trillion instead of $41

trillion. nobody likes to be a piggy bank. >> ylan, thank you. in d.c. mike, do you think that tax reform is going to be that much harder? what does that do to the view of the markets? >> certainly on the individual tax side i think it makes it a little bit harder. from the corporate tax side i think there's a great deal that can be done. it's important to remember looking at that 40 trillion figure, you're looking at about 3 trillion in corporate income taxes over the next decade. we get $300 billion in corporate income taxes. if you repatriate capitol, that at a lower income tax rate, that by itself could be revenue neutral. if you're trying to to get corporate income tax equity that can be neutral. that is one of the principle reasons people are buying equity. on the expectation that the s&p had higher earnings. you can get that. the other thing additional investment. a lot of presumptions about income tax reform are also going to be based on the repatriation capital. we'll get that revenue and increase growth assumptions. there's also going to be a little bit of political

horseplay in there and fuzzy math. >> on the repatriation and taxes you could raise, it assumes all the dollars will come back even if there is some sort of tax as opposed to a holiday? >> at least a material percentage of the money. think about it this way. also let's remember the effective corporate income tax rates in the united states are substantially lower than the marginal rate of 39 and 35%. we have effective rates in the mid 20s. >> per sum. >> that's exactly what i'm talking about. that equity issue. all you need to do is if you could repatriate a trillion dollars and get 10% it's $100 billion in revenue. >> we know the president met with a lot of business leaders and they've made a lot of announcements about what they plan to do under the new administration. as we get into q 1 earnings on us in a couple of weeks, you have a president that's a two-time loser on big initiatives. first -- you're laughing at me but it's a fact.

>> what are the two initiatives? health care that didn't pass. >> immigration, millions marching in the streets, didn't get that done, and the judge blocked it. >> high in america when it comes to earnings. >> if you're a loser on two issues you're a loser. we have two months to hope to have tax reform before the august break. what is that going to do to corporate guidance. think about these companies guiding using their resources for cap x and hiring. >> still sitting around roundtable discussions with president trump. when you call him a two-time loser, he's been in the office for a handful of days. >> he's had two massive defeats. it's just a fact. massive defeats. >> coming in the mosts controversial areas of his agenda by far. immigration was controversy. the bush republicans were in favor of immigration reform. reagan instituted immigration reform. that was not universally accepted by republicans. >> the process of both of these. they were jumbled. bad. bad process. led to a bad result. and so why do you think that they -- >> okay. fine. fine. health care -- health care --

>> i'm not talking about the market. this is important. >> give me a chance. health care on the sideline. tax reform's in jeopardy. what is it shgs small caps get hit the hardest? >> in the scenario that you just put forth, yes. small caps get hit the hardest. they have the most to gain. by definition they have the most to lose given what you just said. let's talk about how you trade the small caps. it's something we've said i want to say for months but we'll talk about it again. the iwm is the russell small cap index. that's the symbol. 130 has been the line in the sand. if you look earlier this week we got precariously close so in my opinion the rally is still intact as long as iwm remains above 130. >> for more let's bring in kim wallace, head of washington policy research. renaissance macro research. kim, good to see you. >> hi. >> what's your take on what's going on so far today? >> there's a lot going on. i think going forward we have to focus on the substance and the politics of legislation. it's easy to say you move to tax reform and pass it by june.

what's difficult is identifying what the ideas are, put them on paper. get support for it in committee and then pass it to the floor. the focus on the house thus far has been on border adjustment taxation. that's not had life in the senate for the past three months. if you're going to get to tax reform in a hurry, you're going to have to pay for the from what's been the focus of the house, come up with another plan and then bring people in to support it. they're not close to that yet. >> you think basically if tax reform is going to have a shot, border adjustment has to go away? >> that's not what i think, that's what 17 republican senators have said. >> okay. >> you can only lose two of them. by their definition border adjustment is not going to be the plan for tax reform. there has to be a meeting of the minds among the white house and the leaders of the committees and the party and the bill to decide what they want to do about that. it could revert to something that looks a lot like 2001 when president w. bush came in and

shaved points off rates and gave tax cuts. he had a surplus then and that will be part of the conversation. tax reform is not going to be easy. it may happen this year. i doubt seriously it happens before the august break. >> how much damage to the cause of tax reform has been made because speaker ryan sort of fell on his own sword in his press conference today being very remorseful, et cetera, saying that it was not the best buildup they could have put forward. it was a weak bill. >> speaker ryan was best positioned in fiscal policy than any speaker that i know in modern times. he ran the budget committee and ways and means committee. he understands health care and taxes especially. when he he tells you it's going to be difficult to get a health bill, i would take his lead. my sense is that relations have been frayed this week. that happens whenever you consider big bills. it doesn't matter who's in control. they can overcome that but they will have to be willing to

overcome that. the talk of bipartisan will have to come from the result of negotiations about things that the other party cares about. it can't be something you wish for. >> all right. kim, great to speak with you. thank you for your analysis. kim wallace, washington macro. in terms of tax reform? >> yeah, i think it's interesting. i totally, you know, heard the exact same language from ryan when he came out and made the point that it's going to be difficult. this makes it a lot more difficult to get tax reform through when a couple of days ago he was talking about how it's not going to be easy but we're confident we're going to get the health care passage. here's the issue. cuts versus reform. the market's pricing in reform, not full-fledged reform but we're definitely not assuming it's going to be cuts. therefore i think there's a lot of risks. here to this. downside we're a little protected because people still are waiting, they got confidence, they will probably give him a pass, maybe a month or two, but once they start to see cracks they will sell the market more aggressive.

# i think the up side is tapped. i think we're sideways. >> a very serious show today. >> a lot of serious issues. >> we're going to have fun now. >> i love games. >> let's play. >> if president trump were a stock, does his value go up or down today and would you buy? >> wow. >> who wants to take a stab? >> i'll start off. >> all right. >> the beauty of this, you know, i always change around your games. >> i know. >> to fit my games. >> i know. >> the beauty of this is that we don't have a dictator so we can have -- >> really? >> if we did we would haves passed health care. >> we have a very fascist. >> you would have everyone out of this country according to you. >> can i get an answer to my question, please? >> it went up. >> it went up? >> his value went up today? >> his stock went up because everybody knew this bill was dead in the water two days ago. >> isn't that trading lingo? >> no, it's not a dead cat bounce. i think it was his response to it that i think is the reason that his stock went up. i mean, i haven't been a big trump supporter, but i will say that his response, i thought,

was surprisingly good. >> when we see the market go up. look at trump as being the ceo of the country. did he actually make a splash today in my opinion? >> no responsibility. >> i agree with it went up from the scenario he nipped it in the bud and move on. get the country thinking in the mindset of tax reform which has driven the market. it's not health care. >> what happens if we have a lame duck president. from 2010 we had a lame duck president and the market went up dramatically. now we have a fracture within the republican party. you don't like president trump but what happens if they keep him stymied. >> we're very different now. >> is that what we're talking about? >> no. isn't that a good point? >> you're saying that if republicans lose their majority that's a good thing? >> no. right now they have a majority and they're stopping -- for all intents and purposes there's a fracture within the republican party. they're not letting policies go through.

one side of the party has created a lame duck president and now it's putting everybody on hold that's nervous about agendas. >> it's all predicated on tax reform getting passed. >> that sounds a lot like a narrative -- >> we're totally ignoring except for mike. guy adami, please participate. in nis game. >> i think mike's point was a good point. >> he appeared and sounded presidential in that response. >> couldn't disagree more. could not disagree more. >> okay. >> but this would have been my answer. obviously he's not going to do it. >> he quit. he quit. he gave up. >> he took no responsibility and he quit. >> okay. >> let guy answer please. >> i misunderstood. i underestimated the -- how complex this issue is. i misunderstood how arcane politics are but we as a nation are going to -- we as an administration are going to move forward to do everything we can to push through tax reform and

repatriate the dollar as the market goes up. he won't do that but that's what he should do. >> dan, what's your response? >> my turn? >> yes. >> on march 1st stock market had a huge rally. the guy read off a teleprompter the night before for an hour and sounded presidential. he's given it all back. we have a chart of the s&p 500. it just broke on tuesday on the down day, first 1% down day in over 100 trading days. look at the trend it broke there. to me, i'm not telling you we're crashing or going back to 2100, i think a trend has been broken. his upward trajectory has been broken. i think you're wrong that he'd bounce if he was a stock. i think you'd sell rallies. on this guy. >> the market traded up 13% off the election and gave back 2. >> i get it. i know. >> my point is it gave back 2. the way that the market reacted this week was shocking to me. >> it held. the market trend. >> goldman sachs is down right now. the banks are down a year right now. they were going to benefit from deregulation, infrastructure, tax reform, all of the above.

keep an eye on this stuff. because that rolling -- >> a healthy market is a market that can change leadership and still grind higher. >> the rolling rotation you like may see it come undone if nothing happens. >> sure it might. still ahead, wasn't all bad for the administration. president trump with the construction of the keystone pipeline. we'll tell you who the winners and losers could be. in the oil space. much more of our continuing coverage out of washington when "options action" returns. ♪ guyhey nicole, happening here? this is my new alert system for whenever anything happens in the market. kid's a natural. but thinkorswim already lets you create custom alerts for all the things that are important to you. shhh. alerts on anything at all? not only that, you can act on that opportunity with just one tap right from the alert. wow, i guess we don't need the kid anymore. custom alerts on thinkorswim. only at td ameritrade.

hey nicole. hey! i just wanted to thank your support team for walking me through my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary. wait, you forgot your french dictionary. oh, mucho gracias. get help on options trading with thinkorswim, only at td ameritrade.

welcome back to "options action." our continuing coverage out of washington. let's get to the other big story of the day. president trump approving the keystone pipeline. eamon javers in d.c. with that story. high, eamon. >> reporter: hi, melissa. it wasn't all health care. the president had a couple of events on schedule that he did seem more enthusiastic than he did about the health care bill today, including the keystone xl pipeline final approval. he gave it the official go ahead in the oval office as you see there surrounded by members of his administration. here's what the president had to say at that meeting. >> transcanada will finally be allowed to complete this long overdue project with efficiency and with speed. we'll work out the final details as we speak. it's going to be an incredible pipeline, greatest technology known to man. >> he also had charter communications ceo tom rutledge

in along with the governor of texas talking about charter communications bringing jobs back to the united states. this is obviously a key campaign theme of this president. he's happy to meet with ceos and make these job announcements at the white house as he did today. charter saying they're bringing them back, a lot of call center jobs from over seas back to the united states and say they'll be investing $25 billion in hiring. now some critics said this was announced previously. this was a regifting of this announcement, but in any case the white house feels by highlighting these moves by american companies they sort of lead by example and put pressure on other companies to make similar announcements and bring other jobs back to the united states. they feel there's sort of a virtuous cycle here by doing the events at the white house. >> eamon, thank you. at the white house. let's trade this year. we've got to talk about whether or not that does put the pressure on companies. you've seen that time and time again as companies are able to

go to the white house, have their picture taken with the president and announce a hiring binge. it helps bolster the administration. >> we've heard many instances where companies planned on doing things anyway and are using this as a p.r. opportunity. they will at every opportunity. i think that's what they should do. that's in their interests and their shareholder's interests. as far as the pipeline is concerned, i think that's also important. i mean, this is going to be good for mid continent refiners. that's the delivery point for all of the crude that we're talking about. i think it's generally good that he -- for the energy industry that the president clearly supports it. whether you happen to support it or not it's good for oil services. >> i agree. look the mid refiners benefit from it. the face time, the first part of the question, the face time with the president, is that helpful, is that helping drive a process? i think we've seen it with a lot of industries. big cap pharma, i think the drug pricing is off the table for the most part because of what they've sort of come together on. yeah, i agree. i think it's a very important thing to be aligned with the

president. the companies that are have been proven to be winners at least from a perception perspective. >> it's a cycle. there's no reason not to highlight it. if you're charter again. when you think about what is the biggest deal ever that's on the table that needs to get approved or wants to be approved, it's the at&t/time warner deal. if that deal happens who do you think is going to be out there doing a deal with charter. in some ways it makes a lot of sense doing what they are doing. they are fiduciaries to their shareholders. you know what i mean. >> right. >> i can't really argue with that sort of behavior. let's see it for what it is. >> a little goodwill here, right? not that much considering it's something you've already announced. >> totally. all of the ceos as you said before, they have to do this. they will continue to do it. whether or not his quote, unquote, stock goes up or down, they have to do it. the pipeline deal for me, it's old it's stale and they've had rails and pipe lines around that in the interim. i think the saudi aramco is a button as far as the top in oil.

declining oil prices for that entire space is going to be -- continuous process. >> it's not just aramco. his friendliness to the energy industry which will encourage additional production has put a lot of pressure on the long end of the curve. you take a look at crude prices they did not change from 2018, since november, his election they have plummeted a the long end. that pressure is going to be -- >> the largest producer going ipo. i agree. on top of that shgs the largest producer going ipo all of a sudden unwrapping it even if it's 5% saying, hey, saudi arabia wants to share the wealth. that to me screams top of the market. there's no reason they do that. >> does the pipeline hurt some of the rails? >> it might. especially kansas city -- absolutely it could hurt. to steve's point, this has been in the rails for quite some time. to mike's point though, you know, what is great for the oil companies might not be so great. exxon mobil has not traded well since effectively the first couple of weeks of this trump administration. still ahead, with the health care bill derailed for now, what

are traders buying and selling on that news? they'll give you their health care playbook right after this. [pony neighing] what? hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade.

at crowne plaza we know business travel isn't just business. there's this. 'a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly. ♪ guyhey nicole, happening here? this is my new alert system for whenever anything happens in the market. kid's a natural. but thinkorswim already lets you create custom alerts for all the things that are important to you. shhh. alerts on anything at all?

not only that, you can act on that opportunity with just one tap right from the alert. wow, i guess we don't need the kid anymore. custom alerts on thinkorswim. only at td ameritrade. welcome back to "options action." our traders are weighing in. with their health care playbooks. kick it off. >> so although when you look at hospitals, hospitals get a little bit of a short covering. hmo has been a long haul. that's what you want to play. they're going to opt out of obamacare anyway. they're going to make life easier on theirselves. also, if tax reform gets done they have tailwinds from that. either way longer term hmos. >> i know dan will complain about biotech. the small to mid cap names, mna is going to pick up in the space. i think the drug pricing concerns are going to come off the table in several months. you can buy those long term.

and win. >> that's very important, xbi as opposed to ibb. >> exactly. which is weighted -- >> i like the small to midcap playing space. back to the valuations. >> mike co? >> i like united health. this managed to double revenues and double eps since 2010. did well under obamacare. would have done better probably had we gotten a health care bill passed. that is the call option embedded in the stock. if you own it, the valuation is reasonable. >> i don't disagree with your xpi. the xlv, that is a large cap pharma in there. that one double topped at 76. it's down 3.5% since then. i think you can sell that on rallies. i don't think it breaks out above 76. >> rates went higher on expectations that fiscal syst stimulus the economy would improve, rates go higher. if this health care plan somehow puts a -- handy caps a tax -- handy capps any tax reform and fiscal stimulus goes by the way side, the rates can rally. it will start going the other way. what does that mean? it means tlt can rally.

back to you, mel. up next, final word from the traders for the week. stay tuned. hey nicole. hey! i just wanted to thank your support team for walking me through my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary. wait, you forgot your french dictionary. oh, mucho gracias. get help on options trading with thinkorswim, only at td ameritrade.

what?pony neighing] hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat.

it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade. time for the final call. let's go around the horn. steve grasso. >> staying long in the market i think it moves much higher from here. >> i'm going to take some of my bank positions off. bkx. going to sell them. bought them on tuesday, taking them off on monday. >> mike could. >> going to sell june 47.5 puts in halliburton. >> little "options action." >> no down. >> two trades on twitter, right now. tlt, one on spy. >> are they long? what's the -- >> spy is short. tlt is long. >> i'm the guy on tlt. >> no, you're not. >> they said in that -- >> here's guy, what's your trade? >> i think the tlt might work on monday and good show tonight, well done. >> it was. expanded desk. thank you all for being here on

the special coverage of the health care bill. we'll be back here for more we'll be back here for more "fast money" at >> announcer: the following is a paid presentation for conture, a radical breakthrough in younger-looking skin. science will soon give you total control over the way you look. we will be able to grow older only to look younger. in the future, aging will become a thing of the past. until then, there is conture, the revolutionary new non-surgical, anti-aging, skin-toning system you can use at home to help tone, lift, and perfect the look of your skin. conture is clinically proven to