Everyone Has a Plan until They Get Punched in the Mouth By: Gabriel PotterMBA, AIFA® 2017.01.18

Historically, the first 100 days of a new administration are the most important.  It could be especially important in this case since there is Republican control (direct or presumptive) of all three branches of the government.  However, while candidate Trump has promised changes, even at this date, details are scarce.  How much can his administration accomplish if lawmakers and the public can only get to arguing about his specific proposals once the man is placed in the Oval Office?

Optimistic Republicans may believe that they can take over policy decisions while Trump is relegated to a supervisory role once he is President.  Indeed, Trump has signaled willingness to step back and let Speaker Ryan draft proposals for key policy efforts, particularly on taxation.  On the other hand, there are cautious lawmakers – particularly deficit hawks – who are keenly aware that the promises and goals set out by candidate Trump are incompatible with traditional Republican dogma. 

Many Democrats believed, incorrectly, that the lack of specificity from candidate Trump would show him to not be a serious candidate which voters would reject.  In actuality, Democrats were disadvantaged by the lack of specifics from candidate Trump.  Democrats could only speculate about what he might do and Trump himself could offer vague promises of better plans without vetting them.  Voters cared more about a change in tone to the status quo that Trump represented. 

As President elect, there are now signs that Trump may posit plans which are more objectionable to Democrats then his fellow Republicans, at least in some key areas like health-care.  For example, President elect Trump promised “insurance for everybody” as his Affordable Care Act replacement.  Liberal Democrats have interpreted that statement as a promise for universal health care, a long-standing anathema to small-government conservatives.  

There is considerable doubt about the policy directions we will, as a nation, attempt to undergo.  We are getting close to that inflection point.  You could safely argue that it occurs this Friday when President Trump takes the oath of office, but it will probably be delayed for the next few weeks as policies are drafted. The point when plans are committed to paper is the point where sides are finally picked and battle lines are formed.  Only then can we have a sense about possible outcomes based upon the strength (in political capital, number of representatives, and percentage of the population) of each side and where compromises may occur.  After all, "everyone has a plan until they get punched in the mouth.” Mike Tyson.

 

 

 

 

 

Gabriel Potter

Gabriel is a Senior Investment Research Associate at Westminster Consulting, where he is responsible for designing strategic asset allocations and conducts proprietary market research.

An avid writer, Gabriel manages the firm’s blog and has been published in the Journal of Compensation and Benefits,...

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