While President Donald Trump should have “little trouble” getting much of his agenda through Congress, though a full repeal of the Affordable Care Act will be tough, the thrust of Trump’s policies toward the financial sector should be “positive,” but with likely “hiccups along the way,” Andy Friedman of The Washington Update says.
Friedman, in his latest white paper, predicts how Trump’s policies will affect investing, taxes and the markets.
Indeed, Trump told business leaders Monday that his administration is committed to rolling back regulations by 75%, “maybe more,” as well as cutting taxes for the middle class and for businesses — to a 15% to 20% business tax rate from 35%.
As with repeal of the ACA, Trump has suggested that he would also seek to repeal the Dodd-Frank Act, but as in the case of the ACA, “the Senate filibuster rule will preclude full repeal of Dodd-Frank.”
While Trump can roll back many of former President Barack Obama’s executive actions without congressional approval, there are “checks on Trump’s plenary ability to implement his policies,” Friedman said.
In the Senate, 60 votes are required to overcome a filibuster and pass most legislation. While the Republicans have a majority in the Senate, they do not have 60 votes.
However, Congress’ “reconciliation” procedure “permits the Senate to pass most spending and tax legislation with a simple majority,” Freidman explains. “House Speaker Paul Ryan already has said he plans to use this procedure to pass much of Trump’s fiscal agenda, such as tax reform.”
Unlike the ACA, Dodd-Frank has “few financial underpinnings that Congress can eliminate through the reconciliation process,” he notes.