A big tax cut, unprecedented environmental degradation, Wall Street unleashed, and a whole lot of judges.
The scandals, the leaks, the outrages, and the bizarre tweets of the last three years can distract from an important fact about President Donald Trump: He has changed policy in important ways that affect the lives of millions of Americans.
Some of the Trump agenda is standard for a Republican president. White-collar criminal prosecutions have hit a 33-year low. The Justice Department defends state laws that could kick thousands off the voting rolls. The National Labor Relations Board is now more sympathetic to employers than unions. And military spending is on track to reach the same levels as during the height of the Iraq War.
But he’s gone further. While the media, understandably, focuses on Trump’s many scandals, his administration has quietly enacted a far more aggressive agenda than his Republican predecessors. Big boosts to fossil fuel production have come at the expense of an unprecedented deterioration in air quality; tens of thousands of people have lost health insurance by administrative fiat and millions are in the process of losing their nutritional assistance through the same mechanism. He’s remade the judiciary, installing conservative judges at twice Obama’s pace, and he’s consolidated a conservative majority on the Supreme Court that may endure for decades.
Tax changes were Trump’s biggest legislative accomplishment, creating a huge windfall for wealthy shareholders and small gains for the middle class — with revenue losses much larger than initially forecast. He’s also undertaken significant but little-noticed alternations in supervision of Wall Street that increase the riskiness of the banking system, plus drastic changes to immigration policy that go far beyond wall construction.
The immigration changes align with Trump’s main campaign themes, even if they don’t line up in detail with what he promised. But much of this amounts to delivering for big business and the wealthy in a much more dramatic way than his “populist” positioning would indicate. Promises to voters to protect clean air, provide better health care, crack down on banks, and tax the rich have fallen entirely by the wayside.
As 2020 approaches, Trump’s achievements are a reminder that Trump and his team are doing real things that have real impacts on real lives. His successes explain why the conservative movement is solidly behind him, despite its considerable doubts from four years ago. Regardless of what Trump tweets or says or does during the election, it’s worth remembering there’s more to him than the Trump Show.
More oil and gas production, less environmental regulation
A major trend of Trump-era policymaking has been to roll back environmental regulation. This involves going through the process of promulgating new rules that are far more lax than those they replace. The New York Times has identified 53 separate rules that have completed the rollback process and 32 more that are still in the works.
It’s not unusual for Republican administrations to take a more skeptical view of environmental regulation, but the Trump administration really has been more uniformly aggressive on this front than its predecessors, as seen by criticism of the Trump Environmental Protection Agency by several of the agency’s Reagan- and Bush-era chiefs.
This in part reflects the growing polarization of environmental policy issues, which used to be less strictly aligned with larger left-right policy disputes. But it also speaks to one of the key themes of Trump-era policymaking in general: a tendency toward recklessness with regard to politics and public opinion obscured in part by the large volume of coverage dedicated to Trump scandals and Trump’s personal behavior.
As a candidate, Trump was vocally skeptical of climate change regulations but specifically vowed “to promote clean air and water,” which are overwhelmingly popular causes. But Trump has moved to roll back dozens of rules on these subjects without the changes ever becoming a focus of sustained public debate.
Most of these rollbacks’ impacts will be felt primarily in the long term, but already, particulate pollution is getting worse, reversing years of progress. A team of researchers at Carnegie Mellon estimates that 9,700 more Americans died due to air pollution in 2018 than in 2016, in part due to regulatory changes. But the Trump administration is moving to restrict the range of evidence used to demonstrate air pollution’s harms, hoping to forestall the promulgation of new standards that would lead to stricter regulation.
In tandem with the regulatory rollback, Trump’s goal of boosting America’s natural resource extraction industries has been largely successful. There is no broad-based revival of the coal industry, but employment in coal mining has stabilized and is rising slightly in a reversal of recent trends. American oil output has soared to the point where net imports of crude oil and petroleum products are at their lowest level in generations and the country is likely to become a net exporter in the near future. Natural gas output, meanwhile, has soared to record highs, continuing a rapid growth pattern that began during the Obama presidency.
The fundamental causes here are more technological than regulatory, but policy has made a difference at the margin. Trump values boosting extractive industries over environmental protection, and energy production has increased substantially while the air gets dirtier and carbon dioxide emissions rise.
Paring back the welfare state
Trump speaks frequently, albeit somewhat vaguely, about his business deregulation activities.
But a separate area of regulatory activism, one he speaks about much less frequently, has been a spate of activity aimed at paring back the social safety net. Efforts to repeal the Affordable Care Act failed in Congress, and while House Republicans briefly tried to mobilize around a program for cuts in a broad array of non-health safety net programs, their Senate colleagues weren’t interested in taking it up. More recently, however, a more modest version of this agenda has been pursued through regulation.
That starts with the decision to begin allowing states to impose work requirements on their Medicaid programs. Arkansas was the first state to take this step, and nearly 20,000 people lost insurance as a result before a federal district court judge put the waivers on hold. Kentucky also received a work requirements waiver, but Andy Bevin’s election as governor means his state will reverse course. Despite the district court ruling against the administration, it is likely to prevail at the higher levels of a judicial system that is increasingly dominated by GOP appointees.
Beyond the specifics of the Medicaid waiver fight, the uninsurance rate has risen steadily under Trump despite an improving labor market — seemingly because of the administration’s lack of interest in vigorous implementation of the Affordable Care Act. He’s also acted to re-legalize skimpy insurance plans that don’t cover prescription drugs or maternity benefits.
Trump has also launched a three-pronged rulemaking effort to limit federal spending on the Supplemental Nutrition Assistance Program (SNAP). That started with tougher work requirements that could cost 755,000 people their benefits and was followed up by rule changes that would make about 3 million beneficiaries of a different anti-poverty program ineligible for SNAP. Most recently, they proposed some technical changes to how utility costs are calculated that will generate slightly higher benefits for 13 percent of SNAP recipients and larger benefit cuts to about 16 percent of SNAP recipients.
The scale of these changes is tiny compared to the kind of massive cuts to the safety net once envisioned by former House Speaker Paul Ryan (to say nothing of Ryan’s vision of cutting federal spending on the elderly), but the impact on the lives of several million people is quite real — and striking in light of the fact that reducing federal spending or narrowing the deficit don’t appear to be goals the administration is seriously pursuing.
Trump reshaped the tax code
The Trump administration has only one really big legislative accomplishment to its name, the Tax Cuts and Jobs Act of 2017, which initiated a range of changes in both individual and business taxation in the United States.
Republicans both in the administration and on Capitol Hill insisted that the tax cuts would pay for themselves through faster economic growth, which (predictably) hasn’t happened. What’s not as well known is that corporate tax revenue actually fell by more than anticipated in 2018 and has only marginally rebounded in 2019. In part as a result, the budget deficit has been rising faster than the Congressional Budget Office thought it would, even though lower-than-anticipated interest rates have helped the government save money. The big issue is that the investment boom boosters promised didn’t come to fruition, any more than they delivered on the promise of a tax code simple enough that you can file on a postcard.
At the same time, while many Democrats fumed about the huge increase in the deficit TCJA was sure to set off, it’s very difficult to find any evidence that the increase in public borrowing has been a problem. Not only do the government’s borrowing costs remain low, global macroeconomic conditions have been weak enough that the Federal Reserve ended up reversing course this year and slightly cutting interest rates. Under the circumstances, fiscal stimulus delivered by Trump (in the form not only of tax cuts, but also higher spending on both military and non-military categories) has been economically useful, whether or not you think his specific fiscal ideas make sense.
Beyond cutting rates, Trump has also reshaped the tax code in important ways. By substantially increasing the standard deduction, TCJA has reduced the number of families who itemize tax deductions and thus, in effect, made all deductions less valuable and economically important. Pairing this with a reduction in the amount of home mortgage interest that is eligible for tax deductibility has, in particular, narrowed the scope of the mortgage interest tax deduction — long seen as a sacred cow of the tax code — and done so without notably disrupting the real estate market.
TCJA also famously capped the deductibility of state and local taxes, a change that’s unfavorable to blue states and has sparked some half-hearted efforts by congressional Democrats to restore full deductibility. Reverting to the pre-Trump treatment of state and local taxes would, however, be a big tax cut for the rich — and it’s noteworthy that none of the Democratic presidential candidates have embraced this rollback.
Taxes are always changing and if Democrats do well in 2020, it’s predictable that taxes will go up — especially on the rich — reversing much of the fiscal and economic impact of Trump’s bill. But the reshaping of the deductions landscape is likely to be a somewhat enduring, and arguably progressive, part of his legacy.
A bonanza for banks
As a candidate and at times in the early days of his administration, Trump espoused the idea of bringing back Glass-Steagall regulations that would have required the breakup of large financial services companies. That kind of talk evaporated quickly, however, and in office one of Trump’s most significant areas of policymaking has been a broad step back from the more stringent financial regulations enacted in the wake of the financial crisis.
The clearest manifestation of that trend was a 2018 bill authored by Sen. Mike Crapo (R-ID) and backed by many moderate Democrats. There were a bunch of moving parts to this bill, but its key provision was raising the threshold for the highest level of regulatory scrutiny from banks with at least $50 billion in assets to banks with at least $250 billion in assets.
But legislative action is just the beginning of a much broader push. Trump’s Federal Reserve appointees promulgated a more “tailored” version of the Obama-era supplementary leverage rule, allowing the biggest banks to take on more debt and more risk. The Securities and Exchange Commission has brought 40 percent fewer regulatory actions. His Financial Stability Oversight Council has de-designated all four non-bank financial institutions that the Obama administration deemed “systemically significant” and subject to stricter regulatory oversight.
Dodd-Frank requires large banks to maintain updated “living wills” that detail a plan to safely wind down operations in the event of a failure. Trump has relaxed the rule, allowing banks to update their plans once every four years rather than annually — sparing banks some hassle but raising the risk that outdated plans could blow up the banking system. The law also requires banks to submit to “stress tests” that simulate their stability in the event of economic problems. Trump’s appointees have made the tests less frequent and also easier to pass.
The upshot of all this has been to make banks more profitable, which in turn has contributed to strong Trump-era stock market performance. And unlike in the pollution case, nothing bad necessarily happens when bank regulation get laxer — financial crises are inherently rare.
But, in a quiet behind-the-scenes way, a banking system that was deliberately made safer after the crisis is getting riskier again.
Trump has reshaped immigration
Immigration has been at the heart of Trump’s politics from the moment he descended the elevator at Trump Tower and announced he was running for office. And once he took office, he immediately set about changing immigration policy with the first version of his travel ban. There’s been no congressional action on immigration, and outside of the losing skirmish over congressional funding for a border wall, there have barely been any efforts at congressional action on immigration.
Despite the brief surge of attention to the family separation policy, the bulk of these changes have taken place with relatively little debate — though the cancellation of DACA, currently under review by the courts, will doubtless attract considerable attention if it does ultimately get approved by the Supreme Court.
As Vox’s Nicole Narea has detailed, for example, the Trump administration “built up, layer by layer, a series of impediments in Central America, at the border, in detention centers, and in the immigration courts that have made obtaining asylum nearly impossible.”
But many of Trump’s changes have involved legal immigration rather than the hot-button topic of illegal immigration or the gray area of asylum-seeking. Trump has cut refugee resettlements by over 80 percent. He’s made it more difficult to get H-1B visas for skilled technology workers and is in the process of stripping their spouses of work permits.
Most recently, he is proposing new regulations that, according to the Migration Policy Institute, could bar hundreds of thousands of legal immigrants per year from the country by denying visas to would-be immigrants who cannot “prove to a consular officer that they will obtain health insurance within 30 days of their arrival in the US.” This has been put on hold by a district court, but like the Medicaid waivers issue, the decision will ultimately be made by higher courts that are stacked with Republican appointees.
A remade judiciary
Trump speaks frequently about his judicial appointments, in part because he has genuinely had a large impact here and in part because so much of the rest of his policy impact is inherently tied up with the courts.
With relatively little legislation under his belt, Trump’s policymaking has largely consisted of aggressive use of executive discretion. That’s what Obama did during his second term, and conservatives found a means to counter it by identifying friendly jurisdictions to sue in and getting district courts to stay Obama’s actions pending further litigation. Democrats have responded in kind under Trump, and consequently many of his biggest regulatory changes have not yet fully taken effect.
The difference is that from day one Trump has enjoyed a GOP Senate majority and the new rules whereby judicial nominees cannot be filibustered by the minority. Consequently, Trump has seen federal judges appointed and confirmed at a record rate. He’s put 46 Circuit Court judges on the bench in three years compared to 55 across eight years of Obama, meaning a bit over a quarter of appeals court judges are now Trump appointees. If these judges ultimately rule in his favor, the short-term consequences for both immigration and the safety net will be large — over and above the obvious longer-term impact of the judiciary.
But on another level, the extent to which judicial nominations loom large in Trump’s policy resume underscores how thin it is. The Senate has had ample floor time to consider his nominees because members simply haven’t done much legislating. That’s left Trump to executive actions that have certainly been consequential in spots — especially in his key areas of rhetorical focus around energy and immigration — but still a considerably smaller impact than his recent predecessors who all signed multiple major pieces of legislation.
Author: Matthew Yglesias