An insightful write-up from the Allianz of America on what the Trump Agenda may look like. Of course, what Trump said on the campaign and what he will actually do is uncertain at this time. As the picture becomes clearer, we will share our thoughts.
Trump Agenda
- The Fed. Janet Yellen’s leadership of the Fed is in serious doubt as some observers think she will not wait for her term to end in 2018 and may just resign. Trump made Yellen’s position at the Fed a key part of his campaign. But he has also seemed to argue for a low, for longer, interest rate policy. Considering the market’s reaction to his election he may get that.
- U.S. Supreme Court Nominations. With one vacancy on the United States Supreme Court caused by the death of Conservative Justice Scalia and with three Members of Court over at or soon to be over the age of 80, including progressive Justices Ruth Bader Ginsburg (83) and Stephen Breyer (78), as well as moderate conservative Justice Anthony Kennedy (80), the next President is likely to determine the ideological direction of the courts for many years in the future. This could have implications for the Affordable Care Act and the amount of deference courts provide to regulations issued by government regulators Infrastructure spending. One area the candidates agreed was on the need for a massive infrastructure investment in the country. Trump promised to do at least “double” what Clinton had proposed, which could be as much as $1 trillion.
- The Affordable Care Act. The President-elect has promised to repeal and replace Obamacare. The former would take some time as most of the law has been implemented for several years now, and cannot be simply abandoned. His problem is that he also said he would not deny anyone health care, and this means he has to come up with a proposal that would not take away insurance from the 20 million Americans who were extended coverage under the Obama Affordable Care Act. The Affordable Care Act will present a bigger challenge as the Republicans have not yet agreed on an alternative plan. Additionally, repealing Obamacare would result in a budget deficit of at least $137 billion under Washington’s antiquated budget rules. In other words, President-elect Trump would need to figure out how to ensure people keep coverage while also coming up with $137 billion in offsets. It is easier said than done.
- Dodd Frank Act. Trump will likely neuter the Consumer Financial Protection Bureau, which has been taking aggressive enforcement actions against lenders. He will appoint new Chairmen of the Securities and Exchange Commission and the Commodity Futures Trading Commission, who will undeniably have a more deregulatory philosophy than the Current leadership.
- Infrastructure Spending. One area the candidates agreed was on the need for a massive infrastructure investment in the country. Trump promised to do at least “double” what Clinton had proposed, which could be as much as $1 trillion.
- Regulatory Agenda. Expect Trump to make major changes at the regulatory level. He has promised to place a moratorium on all new regulations.
- Climate Change. The EPA’s Clean Power plan, which curbs coal-fired power plant emissions, will also be revised. Trump has no interest in climate change and commitments made by President Obama in various international accords will be negated.
- Trade. President Obama’s dream of reviving the Trans Pacific Partnership (TPP) in the upcoming lame duck session of Congress is now fully dead. And while the Trans-Atlantic Trade & Investment Partnership was already on life support, it seems incredibly unlikely a Trump Administration will seek to revive it. The President-elect has also said he would renegotiate NAFTA or pull out of it – something that the White House does have the power to do.
- Iran. One campaign promise that Trump can keep is overturning Obama’s Iranian nuclear agreement, which was never ratified by the U.S. Senate. It is unpopular and unlike healthcare reform and some other things on his agenda, it can be done through executive action.
- Tax Reform. Comprehensive tax reform remains a priority of Congressional Republicans and especially of current House Speaker Paul Ryan. The GOP will have a real window in 2017 of achieving a big tax bill even though the caucus has not seemed to agree on what its plan should be.
