Topic A for business leaders worldwide is the presumed avalanche of pro-business actions about to cascade from Washington after the new Congress was sworn in yesterday, and especially after Donald Trump is inaugurated in 16 days. But how much of it will actually get done? And when rhetoric becomes statutory reality, what surprises will be buried deep in the bills that are enacted and rules that are imposed?
The scope of what may be about to happen is vast. Here are the big themes that business leaders will want to monitor, especially between now and May 1, the end of Trump’s first 100 days:
-Obamacare repeal. Senate Majority Leader Mitch McConnell has promised that the first Senate vote of 2017 will be to start dismantling Obamacare, but that move could be largely symbolic. The details of the Republicans’ vowed “repeal and replace” policy are from from complete; the process will be extremely complex. Repealing without simultaneously replacing Obamacare could be bad news for employers, forcing them and their workers to take action with little idea of what might come next from Washington, or when.
-Regulatory rollback, especially on Dodd-Frank and the Consumer Financial Protection Bureau. Financial stocks rocketed after Trump’s election on expectations that he’d end Washington’s war on Wall Street. Some deregulation looks inevitable, and courts are already chopping away at the extraordinary structure of the largely unaccountable CFPB. But even some conservative policy wonks favor higher capital requirements for big banks as a step toward avoiding another financial crisis.
-Corporate tax reform. Candidate Trump proposed slashing the corporate tax rate to 15%, which looks highly unlikely, but some reduction from today’s stratospheric top marginal rate of 39.1% could well happen. The real action would be on the accompanying changes intended to broaden the tax base by eliminating sundry deductions, credits, and other deals.
-Infrastructure. Trump proposed a trillion-dollar program funded partially by private investment. The important questions are how drastically that number will be reduced and, as always in infrastructure programs, how much pork must be dispensed to secure passage of actually useful projects.
-Confirmation of cabinet appointees. The Democrats don’t have enough votes in the Senate to block Trump’s appointees, but they can make the confirmation process long and painful for some of them, conceivably even unearthing information that would turn a few Republican senators against one or two of them. That’s important because the Treasury, Energy Department, Labor Department, Justice Department, HHS, and other executive departments are where much of the deregulatory and pro-business action will take place.
The broad outlines of the next few months look clear, but Congress can’t pass broad outlines and agencies can’t implement them. An epic lobby-fest is already underway to shape the details, the precise language of coming changes, which will determine the winners and losers as the Republican-controlled government gets to work. That’s what leaders need to focus on now.