While headlines on Wednesday morning were dominated by news of a Trump victory, Republicans’ retention of both the House and the Senate was equally important. By controlling both the legislative and executive branches, Republicans can presumably implement a policy agenda swiftly and efficiently. While Trump’s agenda largely remains a mystery to most of us, we can anticipate that these policies will be central to the Trump administration over the next four years.
Trump ran on was a populist platform of higher taxes for the rich and lower taxes for middle class Americans. However, where Trump differs from the other candidates is his stance on the corporate tax rate. Trump has repeatedly promised to slash the corporate tax rate from the current 35% to 15%. It should be noted, however, that the use of transfer pricing and marginal profit manipulation currently allows businesses pay much less than the nominal rate. A 15% tax rate would essentially turn the U.S. into an international business haven, opening U.S. markets for significant flows of capital investment.
With lower taxes comes economic deregulation. Under a Trump administration, the U.S. may witness the repeal of the Dodd-Frank financial regulations. This would end the Volcker Rule, which has been responsible for the structural collapse of high-level banks and the growth of private hedge funds. With Dodd Frank’s repeal, the financial sector has the potential for significant growth. However, critics argue that the risks posed by economic deregulation are too high. The markets have already reacted to a Trump presidency in remarkable ways. Following an initial shock, the Dow has been up since Trump’s win.
Affordable Care Act
Another fundamental part of Trump’s platform is a “day one repeal of Obamacare.” While it probably will not happen on the first day, this is something that Republicans have been planning for almost a year. Remember all those bills to repeal the ACA that Obama vetoed? Through a process known as reconciliation, it is much easier for Republicans to repeal the ACA. Instead of 60 votes, they would now only need a simple majority.
The Republicans have prepared an alternative to the Affordable Care Act that maintains many of the legislation’s reforms. Republicans have drafted proposals which retain rules on preexisting conditions and coverage under parental plans until the age of 26. The whole bill would also incorporate many of the Medicare and Medicaid reforms that Republicans have been advocating for years, such as moving seniors back to private insurers and making the government pay for at least part of the premium. The healthcare issue is complex, and no one can guarantee whether the Senate and House will vote along party lines. However, it seem clear that the ACA’s days are numbered.
One of the most controversial claims Trump has made is that he will seek to overturn Roe v. Wade. This is a difficult claim to predict because it hinges on the Supreme Court justices that Trump appoints. John Roberts has argued that Roe v. Wade is settled law, so it is hard to see a direct 5-4 split in the coming year. That said, if Ginsberg or another justice retires and Trump gets a second nomination, it would be difficult to prevent a conservative ruling on such a case. It all comes down to the justices that Trump appoints and the cases that are heard by the court. As of now, it is too early to predict what the judicial climate will be like under a Trump presidency.
LGBT Rights & Gay Marriage
This will be a contentious issue for President Trump. While Trump himself has been relatively pro-LGBT for the last fifteen years, Mike Pence has been the polar opposite. This poses a unique problem. Will Trump succumb to the right wing of his party, or will he stand by his own personal beliefs? In terms of gay marriage, it is even more contentious. Trump has said that he is in favor of leaving it up to the states to decide, and if he does get a “Scalia 2.0,” then we could very well see the overturning of Obergefell v. Hodges. Transgender issues face a similar problem. While Trump himself is not necessarily passionate about undoing the Obama administration’s work in the field, the Supreme Court could act independently in this area.