As a candidate, Donald Trump promised that the instincts and negotiating skills that landed him in the three-comma club would translate to managing the macroeconomy. He was uniquely well-suited to help the nation’s other job creators reach their full potential, he told voters.
Despite such declarations, now-President Trump is proving to be, in at least some crucial respects, unexpectedly anti-business.
As a businessman, he surely knows that one of the key things companies need to plan and make investments is a clear understanding of what the policy environment will look like going forward. And on almost every major policy front — tax reform, health care, immigration, even more bite-size regulations — his administration continues to inject huge amounts of uncertainty into the economy.
Most recently, Trump has decided to scrap the tax plan he released late last summer (which replaced yet another tax plan he’d previously scrapped) and go back to the drawing board, according to the Associated Press.
The latest plan, it must be said, was not exactly good. It was expensive, costing $7.2 trillion over its first decade, according to the Tax Policy Center. It was top-heavy, with three-quarters of the cuts going to the top income quintile. And it was littered with broken promises, including that investment fund managers would no longer get a special tax break (in fact, his plan would have lowered their taxes).
But at least there was a plan, a set of core objectives, something on paper for congressmen to debate and companies to strategize around.
Now that’s going out the window, and the White House is reportedly considering dramatic revampings of the tax code that were completely absent from Trump’s earlier framework, such as eliminating the payroll taxes that fund Social Security. An overhaul that was supposed to be done by August now might get pushed off to next year. Rather than showing leadership, or laying out a set of principles and acceptable trade-offs, the White House has left both legislators and companies in limbo.
To be fair, tax reform is really, really hard — hence the three-decade lull since it was last achieved — and requires lots of complicated horse-trading. Of necessity, parts of it were bound to get negotiated away. But tax reform isn’t the only realm in which this administration is struggling to figure out its vision.
Health care, too, remains in the throes of great uncertainty.
Having suffered from too many mutually exclusive promises about coverage, affordability and government involvement, Republicans’ plan to repeal and replace Obamacare died an ignominious death in late March. Or so we thought. Now it’s back again, more heartless than before, with the White House’s wishy-washy, noncommittal statements about its future leaving great amounts of uncertainty for insurers, providers, employers that self-insure, and of course individual enrollees on Medicaid and the exchanges.
Even absent legislative repeal, Health and Human Services Secretary Tom Price has pledged to do his best to destabilize and unravel the insurance market. In recent congressional testimony, he refused to say whether the administration will continue providing cost-sharing subsidies for insurers in the federal exchanges. No wonder more anxious insurers are dropping out, or are expected to submit higher proposed premium prices than they otherwise would.
On immigration, the Trump administration has also introduced additional ambiguities for employers regarding whom they can hire, and for how long.
Last month, for example, it announced it would stop allowing employers to pay an additional fee to ensure an H-1B skilled-immigrant visa application would be reviewed and given a thumbs-up or down within 15 days. Without such “premium processing,” employers can wait three to six months before finding out whether their chosen hires can ever start work.
The administration similarly punted last week on whether it will allow certain spouses of H-1B immigrants stuck in the green-card backlog to continue working or running their own businesses; for the time being, these immigrants will effectively be given a series of two-month extensions to continue work, making it challenging for their businesses to make long-term investments.
The administration has similarly delayed — but, importantly, not yet announced plans to rescind — implementation of other regulations, often without explanation. These cover areas as varied as energy-efficiency standards for consumer products, the kinds of advice that financial advisers may give their clients, and how much silica dust companies can expose construction workers to.
In many cases, companies are explicitly rooting for these rules to get repealed. Even so, the White House’s persistent indecision on such regulatory matters still forces firms to plan for every possible policy contingency. Which is expensive.
For the time being, markets remain relatively buoyant, counting on outcomes to eventually shake out their way; should the White House not be able to get its act together and offer a more coherent policy agenda, however, that Trump bump could soon deflate.
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