Prospects for US politics in 2017
All eyes are on Washington to gauge President-elect Donald Trump's willingness to shake up US policy orthodoxies
The upset victory of President-elect Donald Trump and Republican control of Congress means that uncertainty about the new administration's priorities and actual ability to drive substantive shifts in government activity will persist for some time, with appointments offering some insight into ideological leanings and policy preferences. However, divisions within the Republican Party, the independent priorities of legislators, the complex machinery of policy-making and the political demands of a restive electorate will shape Trump's learning process as commander-in-chief once in office.
What next
As the president-elect has no background in public office, sent conflicting signals on policy during the campaign and several conservative factions 'claim' Trump's victory as a mandate for their contending objectives, erratic policy-making in 2017 seems likely, though early initiatives will focus on areas of agreement and where the president can rely on either executive branch authority or reliable legislative support, such as deregulation, tax cuts and alterations to the Affordable Care Act ('Obamacare').
Strategic summary
- Fiscal conservatives in the Republican Party will oppose significant increases in deficit-financed tax cuts or public spending.
- Speaker of the House Paul Ryan's position as a party leader will remain precarious, especially if his critics in Congress align with the White House.
- Pro-trade legislators would find it difficult politically and institutionally to check disruptive unilateral executive branch action on trade policy.
- Democratic advocates of stricter environmental and financial regulation are likely to form the party ascendency under Republican government.
Analysis
In the run-up to the November 8 election, nearly all US political actors positioned themselves for a Trump loss:
- Hillary Clinton's campaign drafted an extensive policy agenda under presumed divided government.
- The 'progressive' wing of the Democrats, represented by Senators Bernie Sanders and Elizabeth Warren, planned to pressure a Clinton White House on appointments and regulation.
- Reform-minded Republicans, like Speaker of the House Paul Ryan and Ohio Governor John Kasich, prepared to argue for a substantial shift in tone, policy priorities and political strategy for the party ahead of the 2020 elections.
- Hardliner conservatives formulated a narrative to retain control over the party by emphasising Trump's deviation from ideological purity and betrayal by centrist 'party insiders'.
Trump's election upset throws all this pre-election manoeuvring into disarray and will force both parties to calibrate themselves to the new political landscape in Washington (see UNITED STATES: Trump will test allies and institutions - November 9, 2016).
Congress
In the 115th Congress sworn in next year, the Republicans will hold a 51-48 margin in the Senate, with one outcome (Louisiana) to be determined in a December 10 run-off election, likely to add another Republican seat.
Although three seats have yet to be determined by recounts, the Republicans will have at least 238 seats in the lower house to the Democrats' 194.
Congressional Democrats will face internal divisions ahead of the 2018 midterms, as many Democratic senators running for re-election in states won by Trump will worry about Clinton-sceptical left-wingers pushing the leadership for more outspoken ideological stances against the White House.
Supreme Court
Trump will restore the conservative majority on the Supreme Court with an appointee to fill former Justice Antonin Scalia's seat and could entrench its ideological leanings with future appointments (see UNITED STATES: Vacancies will hinder policymaking - March 31, 2016).
State government
Republicans are now in control of the federal government and most state governments as they set their political agenda for 2017 and aim to roll back Obama's policy accomplishments.
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Decline in Democrat-held state legislative seats, 2009-16
During Obama's time in office, the Democrats lost several governorships and 958 state legislative seats as of November 15, compared to an average 450-seat loss for post-war two-term presidents.
Trade policy
Trump's first policy address since his election indicated that he will walk away from US ratification of the Trans-Pacific Partnership (TPP) once in office, which already faced an uphill climb in Congress (see UNITED STATES: TPP faces major hurdles in Congress - October 19, 2015).
The president-elect has committed himself to reviewing and renegotiating the North American Free Trade Agreement (NAFTA) and the Central America Free Trade Agreement (CAFTA), as well as other trade deals that he lambasted in the campaign.
However, given the significant political and economic disruption that the unilateral imposition of protective tariffs or trade deal withdrawals would pose, a Trump administration is more likely to use the threat of outright US withdrawal to prompt foreign capitals to undertake renegotiation efforts (see CANADA: Trump worries will weigh on economic agenda - November 11, 2016).
Early efforts by Trump to force trade deal renegotiations could lead to radical measures should talks bog down
Pro-trade Republicans from the party's business-friendly wing in Congress -- to whom Trump is not beholden -- will push the White House to limit its anti-trade push to more symbolic actions.
It is likely that these issues will be especially contentious in the next Congress. Many GOP members are among the most avid supporters of open and free trade agreements.
Economic policies
Trump pledged on the campaign trail to reduce tax rates on individuals and corporations significantly, substantially increase the rate of tax deductions, repeal gift and estate taxes, and penalise US companies that close factories in the United States and build facilities overseas.
If Trump is to succeed at pushing Congress to pass major tax reform -- a very likely outcome early in the next Congress -- that will force the government's hand to begin work on substantially cutting federal non-defence spending.
Deficit hawks will prove loath to finance Trump's legislative goals without cuts to public spending
However, given the Trump team's relative lack of governing experience, shepherding legislative support from conservative deficit hawks for increased federal borrowing to finance substantial tax cuts or an expansive infrastructure programme would prove difficult for the White House to accomplish politically, suggesting that they will be joined with cuts to public expenditure in other areas (see PROSPECTS 2017: US economy - November 21, 2016).
The president-elect has pledged that he will work to reduce federal regulations on businesses and industry, which will prove a slow process, given the technical complexity of federal rule-making, and lead to political fights over impacts on workplace safety and on the environment (see UNITED STATES: Soft law could support innovators - October 26, 2016).
Immigration policy
Trump's willingness to reject orthodox Republican opinion on the perceived necessity of immigration reform helped burnish his campaign's anti-establishment credentials and is an area of agreement with hardliner conservatives, such as his nominated attorney-general, Senator Jeff Sessions, a staunch opponent of immigration liberalisation.
Given its role as a political symbol in the campaign and technical difficulty in implementation, it is unlikely that the Trump administration will push the Mexican border wall issue to the front of the national agenda after inauguration (see MEXICO: Peso and US relations may struggle - October 13, 2016).
The president-elect is still likely to act on his firm commitment to enforcing immigration laws. He has threatened withdrawal of federal funds from municipalities that become "sanctuary cities" by hindering the detention and deportation of undocumented migrants in defiance of likely increased federal action.
Efforts to restrict the H-1B visa programme for skilled foreign workers -- a key goal of Sessions and a proposal mooted in Trump's post-election 'policy' video message -- could strain White House ties with the US business community, particularly technology firms, as well as India and China, the largest source of H-1B visa holders (see UNITED STATES: Immigration delays stymie job creation - February 18, 2015).
Energy and environmental policy
Trump has vowed to backtrack on US commitments under the Paris Agreement signed under the Obama administration, likely by pulling Washington's pledges of funding and emissions reductions (see PROSPECTS 2017: Climate governance - November 18, 2016).
The new president is likely to reopen federal lands to oil and gas exploration and drilling -- though market conditions will determine activity in a low-price environment -- as well as coal mining (see UNITED STATES: Markets will trump energy policy - November 15, 2016).
He has pledged to roll back regulation of fossil fuels extraction and weaken the role of the Environmental Protection Agency, making its work mostly limited to an advisory role.
Robust federal support for renewable energy sources is probably off the agenda in a Trump administration. Sub-national support, private sector buy-in and a degree of path-dependency from the Obama years will support increases in renewable energy generation, albeit at a slower pace (see UNITED STATES: Coal symbolism will shape energy policy - November 22, 2016).