On Tuesday evening, President Trump addressed a joint session of Congress to outline the path forward for his 2017 policy agenda. The president’s agenda is ambitious, yet Trump signaled the White House’s desire to work with Congress to implement the broad sweeping changes he promised during the 2016 presidential campaign.

Healthcare

During his address, President Trump reiterated his call for the repeal of the Affordable Care Act (“ACA” or “Obamacare”). The president repeated many of the criticisms he leveled against the ACA during the 2016 campaign, including that the legislation has caused premiums to rise exponentially. The president restated his commitment to working with Congress to draft replacement legislation that will simultaneously “expand choice, increase access, lower costs, and at the same time, provide better healthcare.”

The president laid out five "principles" for health reform, most of which he championed during his presidential campaign.

• New tax credits to help individuals purchase coverage
• Expanded use of health savings accounts
• Greater state flexibility for Medicaid
• Allowing insurers to sell health plans across state lines
• Keeping the popular ACA provision that prohibits insurers from discriminating against individuals with preexisting medical conditions

The president’s push and a tacit endorsement of Speaker Paul Ryan’s “Better Way” proposal may give the effort the boost it needs to rally Republicans, potentially some Democrats, and stakeholders around a unified plan.

Trade

On Tuesday evening, President Trump reiterated a point he has made several times both as president and during his campaign: free trade must be fair trade. In doing so, the president touted his Executive Order withdrawing from the Trans Pacific Partnership and his intention to renegotiate the terms of the North American Free Trade Agreement.

As noted in a previous alert, the Trump trade agenda will deemphasize multilateral agreements and instead focus on bilateral negotiations. The president’s trade agenda received a boost Monday, February 27 when the Senate confirmed Wilbur Ross as Secretary of Commerce on a 72-27 vote. The expectation is that Secretary Ross will be the point person on trade, working in conjunction with U.S. Trade Representative Robert Lighthizer and Peter Navarro, the Director of the newly formed National Trade Council.

Energy

As noted previously, President Trump is taking action in regards to energy policy. He moved quickly to follow through on his campaign pledge to revisit the Obama Administration’s rejection of the Keystone XL and Dakota Access pipelines, signing executive orders in his first week to revive the projects and streamline their approval.

With the confirmation of former Oklahoma Attorney General Scott Pruitt as Administrator of the Environmental Protection Agency, the Trump Administration is now well positioned to begin the deregulation effort the President promised during the campaign and restated last night.

Infrastructure

The president reiterated his commitment to investing in “our national rebuilding” by announcing his intention to ask Congress to pass legislation that would produce a $1 trillion investment in U.S. infrastructure. The president announced that this plan would be “financed through both public and private capital, creating millions of new jobs. 

Parsing the president’s language, it is worth noting that he did not propose $1 trillion in new spending, but rather collaboration with the private sector. The prospect of significant private capital investment in infrastructure has earned a mixed reception on Capitol Hill. Most members of Congress understand the federal government lacks the resources to fully fund a trillion dollar infrastructure investment, but many rural lawmakers are leery that federal funds will flow to popular projects in major urban areas while private infrastructure investors will shun rural projects which lack a large user base to support long term revenue streams.

Tax Reform

President Trump made his case for tax reform, although he stopped shy of endorsing specific policy proposals. In the words of the president, his Administration is “developing historic tax reform that will reduce the tax rate on our companies so they can compete and thrive anywhere and with anyone.” The president likewise recommitted to providing “massive tax relief for the middle class.”

Any tax reform effort faces several challenges. First, members of both the Senate and House have expressed a desire that any tax reform legislation not add to the deficit. Crafting deficit-neutral tax legislation is difficult by itself, but even more so when that legislation is looked to as a way to pay for other priorities, such as expanded border security, domestic infrastructure investments, or increased military spending.   Second, because the process of eliminating tax breaks to pay for rate reductions necessarily involves picking winners and losers. The intense lobbying around the specifics of tax reform could delay or even derail the effort. Finally, dynamics in the House and Senate will present obstacles. Republicans maintain only a slim majority in the Senate, meaning some Democratic votes will be needed unless Republicans invoke the budget reconciliation process, a route that provides its own set of complications and limitations. 

Trump Cabinet and Supreme Court Nomination

During Tuesday’s address, President Trump drove home the point that he is following through on promises he made to the American people during his campaign. Trump noted that he was doing so despite not having his full Cabinet in place more than five weeks into his presidency. Despite a very slow start to the confirmation process, most of Trump’s cabinet secretaries are now in place, with Commerce Secretary Wilbur Ross being confirmed hours before Trump’s speech and Secretary of the Interior Ryan Zinke approved the day after. The departments of Agriculture, Labor, and HUD still await their Senate-confirmed leaders. 

The campaign promise that may have been most important to Trump’s victory was his pledge to appoint a well-respected conservative jurist to replace the late Justice Antonin Scalia on the Supreme Court. Trump’s nomination of Judge Neil Gorsuch of the Tenth Circuit Court of Appeals has been met with high praise from Republicans. Senate Democrats will fiercely scrutinize Gorsuch’s record, although they have yet to decide whether to launch a full-blown filibuster to block Gorsuch. They are well aware that a filibuster may be popular with liberal voters, but give Republicans an excuse to change Senate rules to allow confirmation of a Supreme Court justice with a simple majority. This would then clear a path for the president to nominate a very conservative judge or jurist to the Court were he to make a second appointment to the Court.

[View source.]