From
Obamacare to Yellen: What can Trump do?
Five
questions on the limits on the president-elect as he heads for the
White House
10-11-2016
by: Lauren Fedor
Donald Trump
repeatedly promised during his campaign to overhaul or repeal some of
President Barack Obama’s signature policies, including his
healthcare and financial reforms, on “day one”. He has also said
he wants to change the people at the top of the Federal Reserve and
the judiciary, which are independent parts of the US government.
But the US system is
famous for its checks and balances, which make it hard for one branch
of government, even the president, to act unilaterally. So how fast
can things change after Mr Trump takes over on January 20?
Mr Trump has vowed
to repeal the Affordable Care Act, or “Obamacare” in his first
100 days in office. The law, enacted in 2010, has extended health
insurance to 20m Americans but it has come under criticism for its
rising costs. US government figures released in October showed that
insurance premiums in the programme will jump by an average of 25 per
cent next year.
To replace or fully
roll back Obamacare, Mr Trump needs Congress to pass a new law, which
is entirely possible.
Republicans control
both the House and the Senate, and their leadership shares his
distaste for the law. Senate majority leader Mitch McConnell has
called it the “single worst piece” of legislation passed during
Obama’s presidency. But the process could become bogged down if
Congress and Mr Trump do not agree on what should replace it.
Should he desire, Mr
Trump could take other steps to cut back the programme unilaterally.
For example, he could stop enforcing certain Obamacare provisions,
such as the individual mandate that requires most people to have
insurance, or refuse to approve states’ changes to their Medicaid
programmes for low-income people.
In May, Mr Trump
said he would “most likely” replace Federal Reserve chair Janet
Yellen if elected, telling CNBC that Ms Yellen is “not a
Republican” and that it would be “appropriate” to put someone
new in the position when her four-year term expires in February 2018.
As president, Mr
Trump will have the power to nominate all members of the central
bank’s Board of Governors to 14-year terms. He also appoints the
Federal Reserve chair and vice-chair to four-year terms.
However, Federal
Reserve governors may not be removed from office before their terms
run out except for “cause”, which does not include their policy
views.
Mr Trump has sent
mixed signals on his plans for financial regulation, but said he
wants to come “close to dismantling” Dodd-Frank, the complex 2010
Wall Street reform act aimed at preventing a repeat of the financial
crisis.
Many Republicans in
Congress abhor the reform law, which created the Consumer Financial
Protection Bureau and includes 2,000 pages of new regulations,
including tighter capital requirements for banks and the so-called
“Volcker rule” that clamps down on banks’ ability to bet their
own money.
The president-elect
could end the global postwar order and unwind Obama’s legacy
Key Republicans in
Congress, including House Speaker Paul Ryan, have floated Dodd-Frank
reform plans. But as with Obamacare, the difficulty will be in
agreeing on the details. Democrats do not have the votes to stop a
new law on their own, but they can make political hay from provisions
that appear to go too easy on Wall Street.
However, Mr Trump
can reshape some financial regulation more quickly by using the
regulatory process. He will be able to appoint new chairs to each of
the main financial watchdogs, who could then rewrite or repeal the
detailed rules that spell out how the principles laid down in
Dodd-Frank apply in practice.
For example, a new
chairman of the Commodity Futures Trading Commission could rewrite
the rules governing the trading and clearing of interest rate and
credit derivatives, and take a more relaxed approach.
Analysts also say Mr
Trump could seek to defang the CFPB without killing it by appointing
a new director who is more friendly to industry than the incumbent,
Richard Cordray. However, there is an ongoing legal dispute over the
president’s power to remove a CFPB director.
The brokerage
industry is hoping that Mr Trump will also move quickly to scrap
another regulation put in place recently by the US Labor Department
that requires financial advisers to act in the best interests of
their clients. One of Mr Trump’s top Wall Street advisers, Anthony
Scaramucci, has said the president-elect will repeal the rule, which
can be done without congressional approval.
The highest US court
consists of nine justices, who are appointed by the president and
confirmed by the Senate. They serve until they die in office, resign
or retire.
The court currently
has four Democratic appointees and four put in place by Republicans.
There is one vacancy created by the death earlier this year of
conservative Antonin Scalia.
Mr Obama nominated
centrist appeals court judge Merrick Garland in March, but Senate
Republicans refused to vote on his appointment.
Mr Trump has already
published a list of 21 people that he would consider to fill Justice
Scalia’s vacancy, but a right-leaning appointment by Mr Trump would
not alter the balance of opinions on the high court.
There are also three
justices in their 70s or early 80s — liberal justice Ruth Bader
Ginsburg is 83 years old, while liberal Stephen Breyer is 78 and
justice Anthony Kennedy, who is a Republican but has been the swing
vote on crucial issues, is 80.
If any of them step
down, Mr Trump would be in a position to shift the court more
decisively to the right on issues such as abortion and gay rights.
All Supreme Court
appointments need the approval of a simple majority of the Senate,
but if one party filibusters, or seeks to stop an appointment with an
extended debate, a so-called “supermajority” of 60 senators is
needed to end the debate and force a vote. After Tuesday’s
election, the Senate will have 51 Republicans, 46 Democrats and two
independents who generally vote with the Democrats. The open
Louisiana seat is scheduled for a December run-off election.
Will Mr Trump roll
back environmental protection?
Mr Trump, who has
called climate change a hoax invented by China to make US
manufacturers uncompetitive, has vowed to “cancel” the Paris
climate agreement, which was adopted last year and received the
approval of 55 countries last month.
No single country
can abolish the Paris deal. But Mr Trump could decline to participate
in the accord and refuse to work to reduce greenhouse gas emissions
in the US — non-compliance that is unlikely to result in any
penalty.
Mr Trump has also
promised to open up more federal land to oil and gas drilling and
coal mining, while diminishing the role of the Environmental
Protection Agency. He has talked about scrapping a range of
environmental regulations, including Mr Obama’s $5bn Clean Power
Plan, which seeks to cut greenhouse gas emissions.
However, changes to
the Clean Power Plan or other environmental laws would likely face
legal challenges from environmental groups.
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