Pre­dic­tions for the new year

For one, a sweep­ing pro-growth, pro-jobs bill will be swiftly passed

The Washington Times Daily - - OPINION - By Don­ald Lam­bro Don­ald Lam­bro is a syn­di­cated colum­nist and con­trib­u­tor to The Washington Times.

Mak­ing po­lit­i­cal pre­dic­tions about the new year is a risky busi­ness, but some things are cer­tain to hap­pen in the na­tion’s cap­i­tal that will be fully con­trolled by the Repub­li­cans. So here goes.

A sweep­ing pro-growth, pro-in­vest­ment and pro-jobs bill will be swiftly passed and signed by Pres­i­dent Trump. He ran on it, em­braced it and made it the cen­tral part of his agenda.

It will sig­nif­i­cantly lower in­come tax rates for busi­nesses and in­di­vid­ual tax­pay­ers, and trig­ger a ma­jor ex­pan­sion in an econ­omy that has been sorely in need of job-cre­at­ing cap­i­tal in­vest­ment through­out the eight years of Barack Obama’s per­sis­tently, slow-growth pres­i­dency.

And here’s the bonus in the Repub­li­can’s tax cuts: it will boost tax rev­enues (since more peo­ple will be work­ing), as a re­sult of cleans­ing the tax code of dys­func­tional, spe­cial in­ter­est tax breaks and other loop­holes.

We’ve had three ma­jor tax over­hauls since the 1960s: the across-the-board Kennedy tax cuts (which Democrats never talk about), and the Rea­gan tax cuts en­acted in the early 1980s, and in the af­ter­math of Mr. Rea­gan’s land­slide, 49-state re-elec­tion in 1984.

In both cases the econ­omy took off, with the Kennedy tax cuts pro­duc­ing a bud­get sur­plus by the end of that decade.

We are al­ready see­ing the eco­nomic div­i­dends in an­tic­i­pa­tion of the Trump/GOP tax cuts, with the stock mar­ket soar­ing to record lev­els in just the past month.

The Dow Jones in­dus­trial av­er­age, a ma­jor in­dex of 30 blue chip stocks, has soared 10 per­cent since Mr. Trump’s elec­tion, inch­ing to­ward the 20,000 mark in re­cent weeks.

“I’m bullish,” said David Kass, a Uni­ver­sity of Mary­land fi­nance pro­fes­sor.

“Gross do­mes­tic prod­uct should grow fast, cor­po­rate prof­its should be higher, and there­fore I would ex­pect eq­ui­ties to do well dur­ing 2017,” Mr. Kass said.

The Wall Street Jour­nal’s Money Beat col­umn is fore­cast­ing “mid- to high sin­gle-digit earn­ings growth,” as a re­sult of a faster grow­ing econ­omy and stronger profit mar­gins.

One of the first items on the GOP’s agenda will likely be re­peal­ing and re­plac­ing Oba­macare, but if you are look­ing for a quick end­ing to Pres­i­dent Obama’s sig­na­ture re­form, you can forget it.

The leg­isla­tive like­li­hood will be a grad­ual, two to three year tran­si­tion away from the orig­i­nal med­i­cal in­sur­ance pro­gram, while keep­ing some of its more pop­u­lar fea­tures, such as in­sur­ance cov­er­age for pre-ex­ist­ing con­di­tions, and pos­si­bly an ex­pan­sion of Med­i­caid among the states.

The bud­get will be cut, too, tight­en­ing ap­pro­pri­a­tions for long for­got­ten, waste-rid­den bu­reau­cra­cies, and fur­ther shrink­ing the deficit. Some of the spend­ing cuts may be phased in over sev­eral years.

The big ex­cep­tion will be in de­fense, which will see big in­creases at the Pen­tagon, such as mis­sile mod­ern­iza­tion, and cy­ber war­fare pre­pared­ness.

But some of Mr. Trump’s big spend­ing pro­pos­als could face rough op­po­si­tion from Repub­li­cans, par­tic­u­larly his plan for re­build­ing the na­tion’s in­fra­struc­ture. De­spite prom­ises of long term job-cre­ation, Mr. Obama’s pro­gram was a costly, short-term fail­ure.

As for those pre­dic­tions that Mr. Trump will have a nasty, tur­bu­lent re­la­tion­ship with Repub­li­can lead­ers on Capi­tol Hill, he has in fact reached out to law­mak­ers on sev­eral fronts to im­prove his re­la­tion­ship with Congress.

He has forged a closer work­ing re­la­tion­ship with House Speaker Paul Ryan, filled his new ad­min­is­tra­tion with five sit­ting law­mak­ers, and picked the wife of Se­nate Ma­jor­ity Leader Mitch McCon­nell to be his sec­re­tary of Trans­porta­tion.

Un­able to get many of his pro­pos­als through Congress, Mr. Obama has signed a long list of Con­sti­tu­tion­ally-du­bi­ous, ex­ec­u­tive orders in an end run around the leg­is­la­ture. Mr. Trump will re­scind those orders on his first day in of­fice.

But there were many other prom­ises that Mr. Trump made in his pres­i­den­tial cam­paign that are go­ing nowhere dur­ing his pres­i­dency.

First and fore­most, the 20-foot wall along our bor­der with Mex­ico is one of them, and, need­less to say, Mex­ico is not go­ing to pay for it. Nor is Congress go­ing to approve it.

Nei­ther is Congress go­ing to ap­pro­pri­ate the bil­lions of dol­lars to build a na­tion­wide po­lice force to ar­rest, de­tain and de­port 11 to 12 mil­lion il­le­gal mi­grants. It’s not go­ing to hap­pen.

As for the nutty idea to im­pose or raise trade tar­iffs on im­ported goods, as Mr. Trump has re­peat­edly pro­posed, there isn’t a ghost of a chance that the Repub­li­can Congress will raise taxes — which is what a tar­iff is — on what mil­lions of hard-pressed Amer­i­can con­sumers buy.

Some of Mr. Trump’s big spend­ing pro­pos­als could face rough op­po­si­tion from Repub­li­cans, par­tic­u­larly his plan for re­build­ing the na­tion’s in­fra­struc­ture.

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