GOP Senate will limit Dems’ ability to erode Trump economy
Democrats campaigned on providing a check on President Trump. Now in control of the House of Representatives, they won that, but a still-Republican Senate will also provide a check on Democrats. Corporate America dodged a bullet.
Rep. Nancy Pelosi (D-Calif.) regaining the speaker’s gavel (as she almost surely will) will likely mean legislative gridlock, but that is nothing new and perhaps nothing to lament. In fact, it may well be the anticipation of just such a result that has pushed the stock market higher in recent sessions.
After eight years of the Obama presidency and two years of “Resistance,” here’s what we know: Democrats are not pro-business. They favor government interference over free-market solutions, and they are not dedicated to growing the economy, since they do not regard rising demand, hiring and wages as critical to progress.
In short, Democrats are not on the Trump Train. Ergo, it’s a darn good thing they didn’t take the majority in the Senate.
Democrats in power in the House, and also at the state level, will attempt to block Trump’s pro-business agenda by pushing to raise corporate taxes and the minimum wage, renewing costly environmental regulations, advocating tougher oversight of banks and more safeguards for workers. They will also look to expand the government’s role in providing health care.
Thankfully, the GOP-led Senate is a mighty speedbump to those Democrat ambitions. Legislation written in the House has to pass the Senate; there will be few bipartisan collaborations in the next two years, especially as numerous Democrats in Congress prepare to run against President Trump in 2020.
They will interpret their gains in the midterms as validation of their Resistance program, even if it stymies progress for the country.
An exception could be if Democrats join with Republicans in sponsoring an infrastructure program. They will have to reward voters for turning over control of the House, and they will want to show that they can do more than protest and obstruct.
The GOP will be eager to go along, since they have been proposing an infrastructure investment scheme for over a year, knowing that it is extremely popular with voters.
Most likely, Democrats would not support the approach taken by the White House, which depended on public-private partnerships (P3s); they would prefer to rely more heavily on federal spending.
The Trump administration adopted the P3s approach because, especially after cutting taxes, the federal budget could not support the costs (over $1 trillion) needed to repair and update our crumbling tunnels and roads.
Even though some Democrats (like former Virginia Governor Terry McAuliffe) have backed P3s in the past, many in the party think those partnerships undercut union workers and cost taxpayers more in the long run.
The expanding federal budget deficit will act as a brake not only on infrastructure spending but also in curbing other liberal aspirations, like a greater government takeover of health care.
The country would surely be better off resolving the serious (and ongoing) deficiencies of ObamaCare, but Democrats will likely have little appetite for such a thorny undertaking. Plus, they used the Republicans’ bobbling of health-care policy to great effect in the midterms, and they will hope to do so again approaching 2020.
Instead of passing legislation, House Democrats can be counted on to please their base by ginning up investigations of the president and his administration and by calling for impeachment. None of this will benefit the country, but it will pull in campaign contributions. Markets won’t like the ensuing drama, but if the Mueller probe is a guide, the Trump White House will survive.
That doesn’t mean we shouldn’t expect a slew of bills issuing from the House on raising the minimum wage or expanding government-run health care over the next two years. However, all such legislation will die a quiet death en route to the Senate.
This is already the norm. Unbeknownst to most Americans, the House, led by a frustrated Speaker Paul Ryan (R-Wis.), has been busy these past 22 months creating legislation, some with bipartisan support, most of which remains in limbo. As of July, the House had passed 768 bills, 569 of which were languishing in the Senate.
The reason, in part, is that Senate Minority Leader Chuck Schumer, “Master Resistor” that he is, has demanded a maximum floor debate time of 30 hours for an unprecedented number of Trump appointees, invoking a procedure known as cloture.
Even non-controversial candidates for lesser posts, who ultimately win bipartisan approval, have required those wasted 30 hours. For instance, Senate Democrats demanded maximum debate on Jerome Powell’s nomination as chairman of the Federal Reserve before approving his appointment by a 84-13 vote.
This has so clogged the works of the Senate that Majority Leader Mitch McConnell (R-Ky.) has had to prioritize, which he has done by putting new bills mainly at the back of the queue and focusing on tax reform as well as placing conservative judges on the Supreme Court and on lesser federal benches around the country.
One issue important to businesses could prove nettlesome: House Democrats could scramble President Trump’s already bumpy progress on trade. Congress will have to sign off on the new North American Free Trade Agreement (NAFTA) deal struck by the White House.
AFL-CIO leader Richard Trumka recently told Fox Business’ Maria Bartiromo that he (and presumably Democrats) would support the revised agreement only if it reduced the advantages held by Mexican workers, by demanding higher wages and more unionization. The deal does address those issues, but Trumka and his union colleagues may push for more.
American businesses want resolution on trade; obstruction on deals would be a negative for investment and expansion.
The economic outlook remains bright, with consumers and businesses recording high levels of optimism, which should drive growth for the next several quarters. Markets won’t like impeachment talk, but fundamentals are more important, and they remain intact.
Published on The Hill
