One key reason Republicans decided to tackle the politically contentious topic of healthcare through the repeal-and-replace of the Affordable Care Act (aka ObamaCare) right from the get-go is the embedded tax-breaks. If the AHCA, in some form or other, gets through the House and Senate, then lawmakers have latitude to be creative with their tax-plans, since the ACA locked in a substantial tax burden. In other words, because the Republicans went after health-care first, the media’s consensus has been that tax-reform was going to be the next to-do item on the Congressional docket.
There are other common goals between the Republican Congress and the White House. President Trump has been pretty active with his executive orders with an eye towards reducing regulation. Congressional Republicans, emboldened by the passage of the AHCA through the House of Representatives, are starting to look ahead at other options before tackling tax-reform, including undoing financial system regulations as implemented through the Dodd-Frank Act with a new law, the Financial Choice Act.
Here, timing becomes a factor. Recall from our previous blog post that the new fiduciary rule takes effect and June 10th. The proposed Financial Choice Act includes provisions which remand the application of the Fiduciary Rule. Again, this act is a wide-sweeping proposal which probably will generate a fair amount of debate and legislative roadblocks on its way through both houses of congress before passage and implementation. However, simply nullifying the Fiduciary Rule isn’t easily done after June 10th. Financial institutions have been given years to put in systems and business practices attempting to adhere to the rule. Rolling back the legislation in any meaningful way has to happen before June 10th or it will become the de facto standard, even if Congress tries to lower the legal requirements.