posted on 28 November 2016
by Elliott Morss, Morss Global Finance
Mr. Trump and Members of Congress:
Ever since President Obama came to power, the Republican strategy has been to block his legislative initiatives. Nevertheless, in the first term, the President was able to get Obamacare enacted.
Also, two Supreme Court judges were appointed. But it his second term, stasis set in. And through both of his terms, "lousy" legislation got passed because compromise was required to get anything done. In addition, "sequestration" was imposed - across the board cuts in all Federal programs without regard where they were justified. This is not governing. This is making a mess of things.
Keep in mind that before the media made the citizenry bi-polar on the candidates, the majority of Americans thought Congress was doing a lousy job. Now, with you (Trump) coming to power in January, all Americans hope you can make some meaningful progress on important issues facing this country. After all, both the Senate and House or of the same party as the President (we think?).
There is bi-partisan support for immigration reform. In fact, there was bi-partisan support for an immigration bill that got shot down at the last moment primarily because Congress did not trust Obama to implement it properly. With Trump in power, this excuse disappears.
Everyone knows that like all major pieces of legislation, Obamacare needs reforms. The primary problem is spiraling health costs. There is nothing in what Trump or Ryan have suggested that will rein in these costs. But come January 20th, the Republicans cannot blame Obama or Congressional Democrats. The time for talk in generalities will be over. The President and his Republican Congress will have to come up with concrete legislation to reduce the escalating costs. As John Mauldin has noted, this will not be easy. I just hope you get it right.
A campaign promise you all made was to tear up the deal limiting Iran's nuclear activities. More thought has to be given as to just how this can be done. In addition to the United States, the signatories included: China, France, Germany, the European Union, Russia, and the United Kingdom. Many of these countries have already negotiated major deals with Iran following the lifting of sanctions. And it is really a stretch to think that these countries will cooperate with any program to re-impose sanctions. Also important here is the fact a significant number of the Iranian leadership never wanted this deal and would jump at the chance to end it, particularly if they knew the sanctions imposed by most signatories would not be re-imposed.
It also appears that you agree countries being protected by the US should bear a larger portion of the cost. Okay. Pass a Congressional resolution urging the President-elect to negotiate new arrangements. The American public wants to see results.
Admittedly, there are some areas where you do not agree. In a recent piece, I speculated that President-Elect Trump might become a Democrat again because of differences he has with Republicans. For example, the President-Elect and Congressional Democrats agree a major infrastructure project is needed to generate good-paying jobs. Trump also wants a major tax cut for individuals and business. Trump argues the resulting growth will make up the revenues lost by the tax cut. Nobody agrees with him. For example, the conservative-leaning Tax Foundation estimates that Mr. Trump's tax plan would reduce federal revenue by about $12 trillion over the next decade. But faster growth would offset only about $2 trillion of that. Many Congressional Republicans have made reducing the Federal government deficit a major tenet of their political posture. And it will be very difficult for many of you to ignore this and support the Trump stimulus program. However, let me remind you: We pay you to govern and not to block needed legislation!
Energy policy is another area where there are conflicts. Many Republican Congressmen reject out of hand any suggestion that human activities are contributing to global warming. Democrats take the opposite view. And the President-Elect has just conceded there might be some legitimacy to the humans contributing to global warming claim. Let's look at energy subsidies. As of July 2014, Oil Change International estimates United States fossil fuel subsidies at $37.5 billion annually, including $21 billion in production and exploration subsidies. Green energy subsidies are far less. However, the disparity is reversed when proportion is taken into account. Fossil fuels make up more than 80% of global energy, while modern green energy accounts for about 5%. That means on per unit of energy generated, green energy subsidies are much larger. Maybe you can formulate a compromise in which all energy subsidies are eliminated.
I could go on. In short, it is time for the Congress and the President to stop haggling and start doing what the American people sent you to Washington to do: compromising and governing.
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