Saturday / December 15.
HomeFT SelectTrump acts fast to reduce ‘burden’ of red tape

Trump acts fast to reduce ‘burden’ of red tape

Donald Trump launched a promised assault on “burdens” imposed by government within hours of becoming US president on Friday by moving to loosen rules tied to Obamacare and halting the introduction of any new regulations.

Between the end of the daytime inaugural parade and the start of evening balls, the Trump administration took its first major policy moves by ordering government agencies to do all they could within the law to freeze any fresh red tape. 

The decision to act quickly on Obamacare, a defining act of his predecessor’s presidency, reflected nervousness among Republicans that Mr Trump’s vow to repeal the reforms in co-operation with Congress could backfire if mishandled.

Some Republican lawmakers are worried that scrapping the law before their party has devised a replacement could lead to some of the 20m people who gained insurance coverage under the programme losing it.

True to Mr Trump’s vow to unshackle business, the White House also ordered all government departments to promulgate no new regulations, withdraw any that are pending, and postpone any recently finalised.

In his populist “America first” inaugural address, Mr Trump said “America will start winning again, winning like never before. We will bring back our jobs.” 

He did not mention healthcare, but has called former President Barack Obama’s reforms a “complete and total disaster” as rising insurance premiums deepen the dissatisfaction of mostly Republican voters over the initiative.

His Friday moves seemed designed to stabilise teetering online exchanges where people buy insurance so that insurers anticipating the end of Obamacare do not abandon their customers.

We must take advantage of the estimated $50tn in untapped shale, oil, and natural gas reserves, especially those on federal lands that the American people own

An order said that pending the repeal of Obamacare it was imperative for the government to ensure “the law is being efficiently implemented [and] take all actions consistent with law to minimise the unwarranted economic and regulatory burdens of the act”.

“Trump has made the calculation that, despite his campaign rhetoric criticising Obama’s imperial presidency, he too will use the full power of the office to bend the law to suit his policy preferences,” said Brandon Barford, a partner at Beacon Policy Advisors.

“Currently, that preference is to ensure the ‘forgotten man’ isn’t disadvantaged while DC negotiates the healthcare law’s replacement.”

The order said agencies should exercise all their authority to “waive, defer, grant exemptions from, or delay the implementation” of any provision of Obamacare that would impose a cost or burden on states, individuals, insurers or healthcare companies.

Although changes to the law known as the Affordable Care Act will require congressional approval, the Trump administration can encourage insurers to stay on the marketplaces by, for example, allowing them to offer skimpier coverage or making it harder for people to buy insurance only when they fall sick.

Mr Trump signed the healthcare order in the Oval Office where he had reinstated a bust of Winston Churchill.

The incoming administration also moved quickly to take over the White House website, declaring Mr Trump’s election victory “miraculous” and publishing a series of policy briefs. It also quietly made an important change to mortgage insurance premiums. Here are the sharp policy shifts it flagged:

Military and terrorism 

As retired general James Mattis was confirmed by the Senate and sworn in as defence secretary, the White House said “peace through strength” would be at the centre of what Mr Trump has dubbed his “America first foreign policy”. 

While Mr Obama was reluctant to describe the US as battling against Islamist terrorism, and former president George W Bush also took pains to avoid suggesting that the US was in a battle with Islam, the new policy states that “defeating Isis and other radical Islamic terror groups will be our highest priority”.

It adds that the Trump administration will work with international partners to cut off funding for terrorist groups and will “rebuild the American military”, reversing declines in the size of the air force and navy because “our military dominance must be unquestioned”. 

John Kelly was also confirmed and sworn in as secretary of homeland security.

Trade

According to a summary of the administration’s trade policy posted on the website, one of its first moves will be to pull out of the Trans-Pacific Partnership that the Obama administration negotiated with Japan and 10 other Pacific Rim economies. 

The Trump administration also plans to move as soon as Monday to notify Canada and Mexico that it plans to renegotiate the North American Free Trade Agreement, which went into force in 1994. 

“If our partners refuse a renegotiation that gives American workers a fair deal, then the president will give notice of the United States’ intent to withdraw from Nafta,” the administration said. “For too long, trade deals have been negotiated by, and for, members of the Washington establishment. President Trump will ensure that on his watch, trade policies will be implemented by and for the people, and will put America first.”

Mortgages 

One of the early actions of the new administration was to cancel a reduction in mortgage fees that had been announced in the final days of the Obama administration. 

A notice on the Housing and Urban Development website said a reduction in the Federal Housing Administration’s annual fees to borrowers would no longer go ahead. The agency offers insurance to protect against defaults. 


FT’s inauguration coverage

Trump’s speech interpreted by FT writers
Ed Luce Global Insight
On the streets of Washington
Melania channels Jackie Kennedy
Trump’s promise to ‘forgotten man’
In pictures


The explanation for the move said that the FHA was committed to make its mortgage insurance programme “viable and effective in the long term for all parties involved, especially our taxpayers”. 

It added that more analysis and research were deemed necessary to assess future adjustments. Ben Carson, Mr Trump’s appointee to lead HUD, said in his confirmation hearing that he would “really examine” the premium cut.

Maxine Waters, the top Democrat on the House financial services committee, said: “Just one hour after being sworn in, President Trump betrayed American homebuyers . . . Just as homebuyers were about to receive a boost that would have saved them $500 per year, President Trump pulled the rug out from under them . . . On day one, Trump is proving that his administration will not have the interests of hardworking Americans at heart.”

Tax 

With Mr Trump promising to create 25m new American jobs over the next decade and return to 4 per cent growth, the White House says its economic plans begin “with pro-growth tax reform to help American workers and businesses keep more of their hard-earned dollars”. 

It repeats a well-worn promise to “lower rates for Americans in every tax bracket, simplify the tax code, and reduce the US corporate tax rate, which is one of the highest in the world”. It does not touch on how the tax cuts will be paid for, an issue that leads to contentious debates over the tax treatment of companies’ offshore earnings and imports and exports. 

Energy and climate 

One striking online change is the deletion of references to climate change on a White House site that was awash with the issue under Mr Obama. 

Instead the new administration flags an “America first energy plan” that highlights Mr Trump’s commitment to scrap Mr Obama’s action against global warming and his international leadership on the issue. 

In a statement underscoring the worst fears of environmentalists, the new White House says: “We must take advantage of the estimated $50tn in untapped shale, oil, and natural gas reserves, especially those on federal lands that the American people own.” Some analysts predict that Mr Trump will use his executive powers next week to boost the oil and gas industry by approving pipeline applications. 

Law, order and guns 

Highlighting Mr Trump’s law and order agenda, the White House says that the new administration will “empower our law enforcement officers to do their jobs and keep our streets free of crime and violence”. 

In another marked contrast with Obama era rhetoric, it says: “Our job is not to make life more comfortable for the rioter, the looter, or the violent disrupter. Our job is to make life more comfortable for parents who want their kids to be able to walk the streets safely.”

While Mr Obama called in vain for more gun control, the White House highlights the new administration’s vigorous championship for gun rights, noting: “Supporting law enforcement means supporting our citizens’ ability to protect themselves. We will uphold Americans’ Second Amendment rights at every level of our judicial system.”

Additional reporting by Sam Fleming and Shawn Donnan in Washington and Daniel Dombey in London

Via FT