Not long after being sworn in as the 45th president of the United States, Donald Trump began taking action on three major reforms — health care, taxes and regulations. So far, the first one hasn’t fared so well, and while he’s pressing ahead on all three policy initiatives, the jury’s still out on how much can be accomplished this year.
Trump’s deregulatory tear started in earnest a month into his administration when he proclaimed that his goal was to cut regulations by as much as 75%, and called on federal agency heads to toe that line.
First came an executive order in late February requiring all federal agencies to appoint a regulatory reform officer to chair a regulatory reform task force in order to “alleviate unnecessary regulatory burdens.”
That order came just weeks after Trump told federal agencies to propose deleting two regulations for each new one they issue, and promised that he’d do “a big number” on the Dodd-Frank Wall Street Reform and Consumer Protection Act.
“We have to knock out two regulations for every new regulation,” Trump said in issuing the order, “Reducing Regulation and Controlling Regulatory Costs.”
Justin Schardin, director of the financial regulatory reform initiative at the Bipartisan Policy Center in Washington, noted that while Congress has already overturned several regulations through the Congressional Review Act, the financial regulatory agencies have “a lot of authority — without congressional action — to reinterpret Dodd-Frank or otherwise pare back regulations.”
If Trump wants to pursue that route of deregulation via agency heads, “he’ll need to fill some of the 14 vacant positions at those agencies. So far, he’s only made one nomination,” Jay Clayton to head the Securities and Exchange Commission.
The full Senate confirmed Jay Clayton as chairman of the SEC by a 61-37 vote on May 2.
Trump has yet to announce nominations for the four positions at the Fed (three governors plus vice chair for supervision); an FDIC chief; two open commissioners spots at the SEC; four open commissioner spots at the Commodity Futures Trading Commission (the chair is also a commissioner); a chief for the Office of the Comptroller of the Currency; and a chair for the National Credit Union Administration.
Health Care Bill ‘Radioactive’
It’s round three for health care reform. After two failed attempts, House Republicans have hinted that a vote could come by May 5 to pass an Obamacare replacement bill, the American Health Care Act (AHCA), Greg Valliere, chief global strategist for Horizon Investments, said in a recent commentary. But Valliere stated that his “optimism over the budget deal has its limits. Even if the House moves, we don’t see this health bill passing in the Senate; too many moderate Republicans consider the bill radioactive.”
As for tax reform, Trump offered a sparse blueprint of his tax reform plans, released April 27 in a one-page document. Industry officials and advisors see some bright spots but maintain the plan is merely “an opening bid” that’s likely a tough sell in Congress.
“We do not think taxes will be the primary driver for most investors and their investment decisions,” said Andrew Crowell, vice chairman of D.A. Davidson’s Individual Investor Group. “It’s the proverbial tail wagging the dog.”
— Read Frontrunners: The 2017 IA 25 on ThinkAdvisor.