New President Faces Old Challenges

SEMA News—August 2017


New President Faces Old Challenges

By Christian Robinson

While history has yet to write its chapter on President Trump, one thing is certain­, Washington, D.C., is a tough town to tame.

At this time last year, we suggested that politics as usual was a thing of the past. The 2016 election was a few short months away, and conventional wisdom had been turned on its head by the man we now know as the 45th President of the United States, Donald Trump. A brash candidate such as Trump had shaken up political contests before, but win a national election? Forget about it.

Despite hiccups along the way, Trump was an unstoppable force. Even on the eve of the election, most “experts” predicted that his opponent, former Secretary of State Hillary Clinton, would win handily. But this was no normal year, and after sweeping historically “blue” states such as Michigan, Pennsylvania and Wisconsin, there was no denying Trump’s populist juggernaut.

The voters had spoken loudly and clearly. They wanted change. They wanted the “swamp drained,” and Trump was the man to do it. Now, just six months into his presidency, we’ll examine just how President Trump is faring in office. Has he drained the swamp, or has the swamp drained him?

One of the cornerstones of Trump’s campaign was the promise to repeal and replace the Affordable Care Act, better known as Obamacare. Now in control of the White House and both chambers of the U.S. Congress, the Republicans’ long-standing goal of undoing Obamacare finally seemed to be within reach. In March, Republicans unveiled their replacement plan, dubbed the American Health Care Act (AHCA). Included was the repeal of the individual and employer mandates for coverage, age-based tax credits for premiums instead of income-based subsidies, and a repeal of the Obamacare-era taxes on investments and medical devices used to pay for the legislation.

Coming off the widely praised nomination of Neil Gorsuch to the U.S. Supreme Court, President Trump was hoping for a quick and easy win on healthcare. Unfortunately, getting everyone in Congress—even those from your own party—to agree on something can be like herding cats. The president learned that the hard way. Various factions within the Republican party took issue with the AHCA. Conservatives didn’t think it went far enough, while moderates thought it went too far. If you appeased one group, the other would pull their support for the bill. It was a classic no-win scenario, and the legislation was temporarily put on hold.

In April, the AHCA was revived after the conservative and moderate wings of the House Republican caucus reached an agreement on how to handle coverage of pre-existing conditions. After passing by the narrowest of margins in the House, Congressional leaders joined President Trump at the White House for a political victory lap. However, the celebration was short lived, as Senate Republicans let it be known that the House’s version of healthcare reform was a nonstarter and that they would be crafting their own bill. To date, no legislation has been put forth, while Republicans in the Senate huddle in a working group to iron out their differences.

Meantime, the ongoing healthcare debate has shifted focus away from the legislative priority many believe President Trump would rather be focused on: tax reform.

The tax code has not seen an overhaul since 1986, when lawmakers simplified the code, broadened the tax base and got rid of many tax shelters. For decades, politicians have talked the talk on reform, but political stalemate has prevented them from walking the walk. Would this time be any different?

The plan President Trump ran on included a wish list of goals, such as lowering individual tax rates to 10%, 25% and 35%, cutting the corporate tax rate to 15% while expanding it to smaller pass-throughs, and eliminating the estate tax, along with a variety of changes to rules
and deductions.

Getting everyone in Congress, even those from your own party, to agree on something can be like herding cats.

Many questions remain, including whether it’s possible to tackle both corporate and individual reform and, more importantly, how to pay for it. What’s critical is that tax reform creates a predictable climate that allows businesses to make long-term investments and plan for the future. The president and his team hope to have reform legislation introduced during the summer and ultimately passed before the end of the year. Given how quickly Congress works these days, is such a goal wishful thinking on their part? Time
will tell.

Another area on which President Trump actively campaigned was repairing and rebuilding America’s roads, bridges, airports and other public works. In his recent budget proposal, Trump called for investing $200 billion in direct federal infrastructure spending over the next decade, along with another $800 billion in self-help incentives to spur state and private spending. Such funding would be a dramatically different approach from the top-down spending proposals of his predecessor.

Many had predicted that infrastructure spending could be a legislative issue on which President Trump could work with Democrats, but the president’s initial proposal has not been well received. As a self-described dealmaker, could this be just an opening offer in the negotiations from the president?

While the machinations and politics on Capitol Hill have slowed President Trump’s legislative agenda, he has found success with regulatory reform. Just six months into his presidency, Trump has already used executive action to rewrite or completely undo several regulations created by his predecessor. Congress has also wielded its power to undo a dozen 11th-hour Obama-era regulations.

Earlier in the year, Congress passed the Regulations from the Executive in Need of Scrutiny (REINS) Act (which would require congressional approval of regulations before they can take effect) and the Regulatory Accountability Act (which would require federal agencies to identify the objective of a proposed rule and choose the lowest-cost alternative). While it will be difficult to pass those bills in the U.S. Senate, since a 60-vote super-majority is required, Trump has used his executive powers to require that two existing regulations must be eliminated for each new one put on the books.

Included in the president’s push to remake government is a review by the U.S. Department of the Interior of up to 40 national monument designations dating back to 1996. The president is seeking a recommendation on whether any designations should be resized, modified or completely undone.

The review applies to any monument larger than 100,000 acres and those that the department determines were not suitably coordinated with those affected. At the heart of the matter is the 110-year-old Antiquities Act, which gives the president free reign to preserve any land with significant natural, cultural or scientific features. This is a welcome change from the previous administration and a hopeful sign of things to come.

While history has yet to write its chapter on President Trump, one thing is certain: Washington, D.C., is a tough town to tame. More often than not, the city changes the man; the man doesn’t change the city. Trump’s presidency is still in its infancy, but with lofty goals yet to be accomplished, there’s not a moment to lose. The midterm elections are just around the corner, and as they draw near, Congress will slow down even further. For President Trump and his congressional colleagues, now is the time for action. It’s time to get to work.

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