The (Economic) Voices In Trump’s Head
President-elect Donald J. Trump will be inaugurated next week, barring something unforeseen.
While that can never be ruled out in the current atmosphere, letâs assume he will take the oath as our 45th president. Then the work begins.
Trump has been busy since the Nov. 8 election choosing the officials and advisors who will make up his administration.
Economic policy is understandably a significant concern for the financial services industry. What kind of economic policy can we expect?
If Trumpâs campaign statements are taken at face value, then he believes less is more. That is, less regulation, lower taxes and smaller government.
Of course, the new president will have to work with Congress, too. The good news there is the power in both the House and Senate is held by Republicans.
So there is the potential to get stuff done â and relatively fast.
Letâs take a snapshot look at the five people Iâve identified as the top players who will bring the most influence on economic policy over the next four years:
Sen. Orrin Hatch, R-Utah
The Utah senator will again chair the Senate Finance Committee and retain enormous power over all financial legislation. The top Republican on the committee since 2011, Hatch took the chairmanâs gavel in January 2015. The committee oversees more than 50 percent of the federal budget and tax, trade and health care policy.
The committee has âa history that runs deep in bipartisanship,â Hatch said in a statement, adding that its members hope to work with âa strong and capable cabinetâ on tax and health care reform, and strengthening of Social Security and Medicare. âThere is room for bipartisan compromise in all of these areas.â
Rep. Jeb Hensarling, R-Texas
First elected to Congress in 2002, Hensarling is an archconservative and chairs the House Financial Services Committee. The committeeâs work in the fall might be a starting point if the Trump administration wants to dismantle financial servicesâ regulation quickly.
The committee passed the Financial CHOICE Act in September. The sweeping financial reform bill seeks to replace the Dodd-Frank Act and kill the Department of Laborâs fiduciary rule.
At the time, Hensarling hailed the bill as a remedy for "growth-strangling regulation.â
Among the many changes the bill proposes, it would block the DOL from implementing its new fiduciary rule by incorporating it into the Retail Investor Protection Act, which passed the House last year. Introduced by Rep. Ann Wagner, R-Mo., the RIPA requires the Securities and Exchange Commission to move first on a fiduciary rulemaking before the DOL can act.
The bill eliminates several Dodd-Frank provisions, including federal "bailouts" and the Volcker Rule, which restricts trading activities at banks.
Under CHOICE -- which stands for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs -- the Financial Stability Oversight Council would no longer be able to designate risky non-banks and others as âsystemically important financial institutions."
Larry Kudlow
An economic advisor to Trump throughout the campaign, Kudlow, is expected to be named head of the presidentâs Council of Economic Advisors.
A strong supporter of deep tax cuts, Kudlow, 69, traces his work on public economic policy to the Reagan administration, where he was associate director for economics and planning in the Office of Management and Budget.
Kudlow is a senior contributor at CNBC and former host of the cable channelâs prime-time âThe Kudlow Report.â He informally advised Trump during the campaign. While Kudlow disagrees with Trump about trade and opposes protectionism, the two agree on cutting tax rates for businesses.
Kudlow is a longtime devotee to supply-side economics, arguing that low taxes on business will spur the economy and even wipe out the federal deficit.
Steven Mnuchin
As the presumptive Treasury Department secretary, Mnuchin will have significant influence on administration economic policy.
Mnuchin is one of several cabinet members making the move from the private sector. He began his career with a 17-year tenure at Goldman Sachs, during which he rose to a vice president position.
After leaving Goldman in 2002, Mnuchin bought and served as CEO of OneWest Bank, and dabbled in Hollywood movie production.
As treasury secretary, he has said his priority is sustained GDP growth of 3-4 percent. He said in order to get there "our number one priority is tax reform."
That means reducing corporate taxes to 15 percent, cutting middle-class taxes, and simplify the tax system.
Mnuchin wants to "strip back parts of DoddâFrank," because he argued it was too complicated, and it prevented banks from lending. Dismantling DoddâFrank is "the number one priority on the regulatory side,â he said.
Anthony Scaramucci
Perhaps the biggest wild card of the Trump economic team is Anthony Scaramucci. The brash New York City financier, 53, reminds me of a young Trump.
Heâs had successes and failures and is prone to saying shocking things. He is the founder and a co-managing partner of investment firm SkyBridge Capital. Scaramucci is the host of Wall Street Week, an investment news show airing Friday nights on the Fox Business Network.
Scaramucci, who also began his career at Goldman Sachs, appears headed for a special economic advisory role with Trump. Last fall, Scaramucci claimed Trump would kill the Department of Labor fiduciary rule.
He also shows he penchant for hyperbole when he compared the DOL rule to the U.S. Supreme Courtâs 1857 Dred Scott decision. Scaramucci later clarified that he meant a government rule targeting one group of people.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].
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