In our Inaugural Wealth Management newsletter, we made predictions on issues we thought the Trump administration would tackle in the first 100 days. On those issues affecting wealth management, as expected, some of our predictions were true. Here, we make some observations about patterns that have emerged, newer predictions about the issues we highlighted and our shaky prediction for the next 100 days.
- Legislation. Perhaps owing to not having filled out many agencies, the President’s legislative packages have seemed to reflect more of the President’s prior occupation as a real estate developer. That is, the legislative packages – whether health care or tax reform – have seemed to be trial balloons, floated as next step ideas from a victorious campaign, as opposed to legislation drafted in a way that suggested a chance to succeed. Such a pattern cannot continue. Not only will the legislative packages fail due to the content but the Administration’s credibility will be at risk. As Americans, we can only hope for more mature legislative roll outs and more cooperation from Congress.
- Taxes. The President campaigned on tax reform. Americans desperately want and need tax reform but, we need tax reform that doesn’t impose a massive debt load on the economy or eliminate the only reliable retirement and tax advantages to the vast majority of Americans – please don’t touch the 401(k) plans or the mortgage interest deduction. Again, the tax reform proposal from Secretary Mnuchin seems to be a trial balloon though some of it is achievable and necessary. Repealing the estate tax, cutting business tax rates and individual tax rates all make sense; whether Congress helps the President achieve these laudable goals, and when, is questionable.
- Jobs Jobs Jobs. An overall theme in the first 100 days is the President’s devotion to increasing the number of job opportunities and workers employed in the United States. Whether that comes through stimulating growth internally or through trade restrictions matters less to the President than achieving the goal. In his public appearances that are billed as events to “thank you for electing me”, the President returns to this theme constantly. Every domestic policy likely will be linked to delivering on this campaign promise.
- Cutting Regulations. As promised, the President has acted to cut regulations through the Congressional Review Act. Changes to coal mining regulations, government contracting process, federal rules on state education programs are just three examples of how the President has used the Congressional Review Act to deliver on his campaign promise. The President seems to have found a favored tool, so we would expect the administration to continue to use the Congressional Review Act as his hammer. The heavy lifting of repealing the ACA, Dodd-Frank and restricting the CFPB, however, likely will require more traditional legislative processes. Therefore, those major changes likely will be on a longer track to accomplish.