Financial regulations scrutinized
WASHINGTON — President Donald Trump ordered his Treasury Department on Friday to review financial measures put in place by the Obama administration, setting the stage for a rollback of regulations that were intended to curtail corporate tax evasion and prevent another financial crisis.
Trump also made other news Friday. He told The Associated Press that young immigrants brought to the U.S. as children and now here illegally can “rest easy,” saying the “dreamers” will not be targets for deportation under his immigration policies. “We are after the criminals,” Trump said.
The president also weighed in on Sunday’s presidential election in France, predicting that Thursday’s terrorist attack along the Champs-Elysees in Paris would boost Marine Le Pen, the far-right candidate who has been sharply critical of “Islamist terrorism.”
“Another terrorist attack in Paris,” Trump tweeted earlier Friday. “The people of France will not take much more of this. Will have a big effect on presidential election!”
Regarding deregulation of the financial industry, Trump has made that a priority. Critics say that if the reviews he ordered lead to policy changes, it would represent a return to the freewheeling days that led up to the 2008 financial crisis.
‘‘From our perspective, it is a direction that is dramatically backwards on financial stability,’’ said Lisa Donner, executive director of Americans for Financial Reform.
The president’s executive order asks Treasury Secretary Steven Mnuchin to review the tax regulations imposed by President Barack Obama in 2016. Those include efforts to clamp down on corporate “inversions,” in which U.S. companies merge with foreign companies to take advantage of lower tax rates abroad.
Viewed alone, undoing the rules would appear to be at odds with Trump’s campaign pledge to reduce incentives for companies to invert.
Robert Willens, an independent tax consultant, said reversing these rules would be a gift to Wall Street bankers and lawyers who have complained that international deal-making has been hampered by the regulations.
‘‘They’ll be dancing in the streets and jumping for joy,’’ Willens said.
Ohio Sen. Sherrod Brown, ranking member of the Senate Banking, Housing and Urban Affairs Committee, said he is particularly concerned about the review of two key provisions under the Dodd-Frank law.
One empowers government oversight authorities to wind down a large, complex financial institution that is failing and dismantle it in a way that is less harmful and disruptive than taxpayer bailouts or bankruptcy. The second would allow the Financial Stability Oversight Council to monitor the risks posed by nonbank financial companies, like the insurance conglomerate AIG, and to impose stronger supervision and stricter rules on such companies.
“After the 2008 financial crisis almost destroyed our economy, Wall Street reform put tools in place to protect working Americans from once again bailing out ‘too-bigto fail’ banks and financial institutions,” Brown said. “Any actions to undermine these protections encourage Wall Street’s risky behavior and leave taxpayers and our economy exposed to another catastrophe.”
Brown also expressed dismay that the Trump review potentially will make it easier for corporations to move their headquarters overseas on paper to avoid paying U.S. taxes.
Mnuchin insisted that would not be the case. He said the administration was working on a soon-to-be released comprehensive tax-reform plan that would address that problem.
Trump, in fact, told the AP he would unveil a taxoverhaul package next week — “Wednesday or shortly thereafter” — that would include a “massive” tax cut for both individuals and corporations. He would not provide details of rate proposals or how he planned to pay for the package, but he asserted the cuts for Americans will be “bigger, I believe, than any tax cut ever.”
Congressional Republicans seemed caught off-guard by Trump’s announcement and did not appear to have been briefed on the details of the forthcoming plan.
The president, who took a hard line on immigration as a candidate, vowed anew to fulfill his promise to construct a wall along the U.S.-Mexico border. But he stopped short of demanding that funding for the project be included in a spending bill Congress must pass by the end of next week in order to keep the government running.
“I want the border wall. My base definitely wants the border wall,” Trump said in the Oval Office interview with the AP.
As a candidate, Trump strongly criticized Obama for “illegal executive amnesties,” including actions to spare from deportation young people who were brought to the country as children and now are here illegally. But after the election, Trump started speaking more favorably about these immigrants, popularly dubbed “dreamers.”
On Friday, he said that when it comes to them, “This is a case of heart.”
But this week, attorneys for Juan Manuel Montes said the 23-year-old from California recently was deported to Mexico despite having qualified for deferred deportation. Trump said Montes’ case is “a little different than the dreamer case,” though he did not specify why.
On foreign policy, Trump said it is possible the U.S. will withdraw from the nuclear accord with Iran forged by Obama and five other world leaders. He said he thinks Iran’s destabilizing actions “all over the Middle East and beyond” are violating the spirit of the accord, though the State Department this week certified that Tehran is complying with the tenets of the deal.
In one other Trump-related development, his administration has rejected a request from Exxon Mobil to waive U.S. sanctions against Russia to allow the company to resume oil drilling around the Black Sea.