quinta-feira, 10 de novembro de 2016

From Obamacare to Yellen: What can Trump do?


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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