THE TRUMP ADMINISTRATION TAKES THE REINS TRANSITION AND POLICY PRIORITIES OF THE PRESIDENT-ELECT January 19, 2017

Transcription

1 THE TRUMP ADMINISTRATION TAKES THE REINS 2017 TRANSITION AND POLICY PRIORITIES OF THE PRESIDENT-ELECT January 19, 2017

2 CONGRESSIONAL TIMELINE In addition to the President-elect s full agenda, lawmakers have a number of looming deadlines they must address. January 3 Start of the 115 th Congress February 6 President submits his budget March 15 Expiration of debt limit suspension (PL ) April 1 Senate Budget Committee reports concurrent resolution on the budget May 15 Annual appropriation bills may be considered in House June 10 House Appropriations Committee reports last annual appropriation bill Congressional Recess Early September Congress reconvenes October 1 Fiscal Year 2018 begins JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER January 20 Presidential Inauguration February 15 CBO submits report to Budget Committees March 20 Deadline for committees to submit estimates to Budget Committees April 15 Congress completes action on the concurrent resolution on the budget June 15 Congress completes action on reconciliation legislation June 30 House completes action on annual appropriation bills September 30 Fiscal Year 2017 ends Source: Title III of the Congressional Budget Act

3 TRUMP S CABINET OFFICIALS Department of Agriculture Sam Brownback Chuck Connor Sid Miller Dave Heineman Charles Herbster Mike McCloskey Ted McKinney Sonny Perdue Bruce Rastetter Don Villwock Department of Health and Human Services Tom Price Department of Labor Andrew Puzder Environmental Protection Agency Scott Pruitt Department of Commerce Department of Homeland Security Department of State U.S. Mission to the U.N. Wilbur Ross John F. Kelly Rex Tillerson Nikki Haley Department of Defense Department of Housing and Urban Development Department of Transportation National Security Adviser James Mattis Ben Carson Elaine Chao Mike Flynn Department of Education Department of the Interior Department of the Treasury CIA Director Betsy DeVos Ryan Zinke Steve Mnuchin Mike Pompeo Department of Energy Department of Justice (Attorney General) Department of Veterans Affairs Rick Perry Jeff Sessions David J. Shulkin Politico 1/17/2017

4 TRUMP S CABINET-LEVEL OFFICIALS Chief of Staff White House Counsel U.S. Trade Representative Reince Priebus Donald McGahn Robert Lighthizer Chief Strategist Senior Advisor Stephen Bannon Special Advisor on Regulatory Reform Carl Icahn Office of Management and Budget Mick Mulvaney Jared Kushner Homeland Security Advisor Director of National Intelligence Counselor Thomas Bossert Dan Coats Press Secretary Kellyanne Conway Director of Trade and Industrial Policy Small Business Administrator Sean Spicer Peter Navarro Linda McMahon Politico 1/17/2017

5 ELECTION RESULTS In 2016, Republicans waged an uphill battle against expectations, defending 24 seats in the Senate while Democrats were only defending 10 seats. Here s what happened and why it matters. KEY TAKEAWAYS President-elect Trump carried members of Congress over the finish line in otherwise difficult races. Rob Portman (R-OH), Richard Burr (R-NC), and Pat Toomey (R-PA) among others rode the President-elect s coattails to victory in battleground states. Senators Mark Kirk (R-IL), Kelly Ayotte (R-NH), and Senate candidate Joe Heck (R-NV) distanced themselves from Donald Trump and lost their elections. Pundits predicted Republicans would lose approximately seats in the House of Representatives and 5-8 seats and the majority in the Senate. Instead Republicans only lost 2 Senate seats and 6 House seats. 64,777,890 Popular Votes 62,475,147 Popular Votes SENATE (+2) HOUSE (+6) NOTE: Two members of the Senate are declared Independents but are shown here as Democrats because they caucus with the Democrats in the Senate.

6 INFRASTRUCTURE PRESIDENT-ELECT ON THE ISSUES WE RE GOING TO REBUILD OUR INFRASTRUCTURE, WHICH WILL BECOME, BY THE WAY, SECOND TO NONE. AND WE WILL PUT MILLIONS OF OUR PEOPLE TO WORK AS WE REBUILD IT. New York Times 11/09/2016 PUBLIC OPINION 70% Of registered voters say increasing federal funding for infrastructure will have a positive impact on the economy. Association of Equipment Manufacturers 11/08/2016 THE TRUMP ADMINISTRATION President-elect Trump pledged $1 trillion in infrastructure investment over the next decade. He also supported revenue neutrality, likely through pairing infrastructure investment with a business tax reform bill. The proposal would offer $137 billion in federal tax credits to private investors who want to back transportation projects. During her confirmation hearing, the president-elect s pick for Secretary of Transportation, Elaine Chao, said she plans to create a task force on the president-elect s infrastructure plan. Chao also stated she believes the Trump administration will support an infrastructure package that includes direct federal spending. CONGRESS There is bipartisan support for infrastructure investment. However lawmakers have started to indicate that an infrastructure package is more likely to happen later in On Capitol Hill there is disagreement on One-time repatriation (House Ways and Means Committee Chairman Kevin Brady (R-TX) and supporters hope to use that money for tax reform) There are an estimated $2.6 trillion in corporate profits abroad. Repatriation could raise as much as $100 billion to $150 billion. If private capital should be leveraged National Infrastructure Bank Distribution of funds (mass transit, bridges, roads, aviation, etc.)

7 REGULATORY REFORM PRESIDENT-ELECT ON THE ISSUES "BUREAUCRATIC RED TAPE AND WASHINGTON MANDATES ARE NOT THE ANSWER. Greatagain.gov 11/10/2016 PUBLIC OPINION Should the next president? 28% 48% 17% CNN 11/09/2016 continue Obama s policies be more conservative be more liberal THE TRUMP ADMINISTRATION President-elect Trump has prioritized regulatory reform calling for a temporary moratorium on all new regulation and canceling overarching executive orders focusing on environmental and energy policies. Trump Administration officials have said they plan to target regulations that kill jobs and bloat government in efforts to increase profits in the private sector to spur innovation. The President-elect s Cabinet is likely to contain former business executives who have pushed back against regulations in their previous roles. In addition, President-elect Trump has indicated his desire to dismantle Dodd-Frank Wall Street Reform and the Consumer Protection Act. Sean Spicer, Trump Administration Press Secretary, told reporters that Donald Trump would begin signing executive actions on on Monday, January 23 (CQ Roll Call, 1/17/2017). Trump will have an immediate opportunity to nominate three members of the Securities and Exchange Commission and three members of the Commodity Futures Trading Commission, two agencies that wrote and implemented more than 100 Dodd-Frank requirements (CQ Roll Call, 1/17/2017). CONGRESS Regulatory reform has been at the core of Speaker Ryan s legislative agenda and Congressional Republicans are likely to push reform shortly after the President-elect takes office. Lawmakers can either pass legislation to roll back regulations or block them through the Congressional Review Act. During the Obama Administration Congress tried to pass legislation that curbed the regulatory power of the President, but it s unclear if Congress will continue on this path or if the President-elect would sign such legislation. Much of Congress role in rolling back regulations will initially manifest in the form of confirming Trump nominees for top administration positions.

8 TAX PRESIDENT-ELECT ON THE ISSUES WE RE GOING TO SUBTANTIALLY SIMPLIFY AND LOWER THE TAXES ANY TIME I HEAR BORDER ADJUSTMENT, I DON T LOVE IT New York Times, 11/09/2016 Wall Street Journal, 1/16/2017 PUBLIC OPINION THE TRUMP ADMINISTRATION President-elect Trump s tax plan is as follows: Business tax reform: Lower corporate rate to 15% Reduce or eliminate most deductions and loopholes available to the very rich Phase out the tax exemption on life insurance interest for highincome earners End the carried interest deduction Allow for one-time deemed repatriation 10% rate End to the deferral of taxes on corporate income earned abroad Offer a choice between expensing of equipment or a net interest deduction Simpler tax code with four brackets (0%, 10%, 20%, and 25%) CONGRESS Republicans will immediately unveil a comprehensive tax reform package (both individual and corporate) that fundamentally restructures and simplifies the Tax Code. Republicans are prepared to use budget reconciliation for tax reform if necessary. This all but assures that reform will happen. The current goal is to send a final bill to President Trump by July 31st. Republican Tax Blueprint Lower corporate tax rate to 20% Lower tax rate for small businesses to 25% Consolidate the individual tax code to three tax brackets Full and immediate expensing on business investments No tax on dividends brought home Territorial system Border adjustment 53% of Americans believe the economy is the most important issue facing the country. If Steven Mnuchin, Trumps nominee for Treasury Secretary, were confirmed, he would play a pivotal role in the tax reform process President-elect Trump called the House GOP border adjustment provision too complicated (Wall Street Journal, 1/16/2017). The "border adjustment" proposal is generating the most attention among business stakeholders. This policy could have significant impact on certain industries engaged in cross border transactions. The border adjustment is a consumption based tax that would not apply to exports and would only be charged on goods consumed in the U.S. CNN Exit Poll 11/08/2016 Key congressional committees of jurisdiction over this issue include: House Ways and Means Senate Finance

9 TRADE PRESIDENT-ELECT ON THE ISSUES OUR GOAL IS NOT PROTECTIONISM BUT ACCOUNTABILITY. FREE TRADE IS GOOD AS LONG AS IT IS FAIR TRADE. Washington Post, donaldjtrump.com, greatagain.gov (12/1/2016) PUBLIC OPINION CNN Exit Poll 11/9/16 THE TRUMP ADMINISTRATION President-elect Trump plans to: Withdraw from the Trans-Pacific Partnership Renegotiate NAFTA or withdraw from the deal under Article 2205 Direct the Treasury Secretary to label China as a currency manipulator Direct the Secretary of Commerce and U.S. Trade Representative to identify foreign trade abuses and use every tool possible to end those abuses 200 Day Trade Plan Day 1: Begin NAFTA Reform Day 100: Label China as a currency manipulator Day 200: Consider formal withdrawal from NAFTA CNN 11/16/16 CONGRESS Leaders in both parties expect that the TPP will not receive a vote in the lame-duck Congress has granted the president emergency powers to place tariffs on trade partners that Trump could use against China Key congressional committees of jurisdiction over this issue include: House Ways and Means Senate Finance House Energy and Commerce Senate Commerce, Science and Transportation

10 FTI CONSULTING IS PREPARED TO ASSIST YOUR BUSINESS WITH THE TRANSITION TO THE NEW ADMINISTRATION AND 115 TH CONGRESS. OUR IMPACTFUL GOVERNMENT AFFAIRS, PUBLIC AFFAIRS AND RESEARCH TEAMS WILL PROVIDE YOU WITH THE INSIGHT YOUR BUSINESS NEEDS TO SUCCEED. FOR MORE INFORMATION, CONTACT FTI GOVERNMENT AFFAIRS. John Cline Senior Managing Director (202)