Trump triumphs: What’s next?

“United we stand, divided we fall. Let us not split into factions which must destroy that union upon which our existence hangs."  – Patrick Henry, 1799 (shortly before his death)

The election of Donald Trump and retention of the House and Senate by the Republicans marks the beginning of a period of great uncertainty at home and abroad. The parlor game in Washington on Wednesday was predicting how closely Trump would hew to his more controversial campaign promises that had departed from Republican orthodoxy, including mass deportations of illegal immigrants, reconsideration of European alliances, a closer relationship with Vladimir Putin and the repeal of long-standing international trade agreements. Will those all become a reality over the coming months, or were they just empty campaign slogans that will largely be abandoned by Washington’s Republican establishment?

Despite the absence of detailed Trump proposals in many areas during the campaign, Washington has begun to brace itself for a tumultuous political new year that could witness a rolling back of many of the Obama Administration’s signature initiatives, from healthcare and financial services reform to robust antitrust and regulatory enforcement. The one potential area of bipartisan consensus in the coming year appeared to be major government spending for new infrastructure projects, which both Trump and Hillary Clinton had heavily promoted during their campaigns, and which could be popular with the new Congress. But the new Trump team will not need approval from lawmakers to begin scaling back a wide range of Obama’s executive orders, most notably those involving immigration and energy policies. And once they are under the control of Republicans, agencies such as the Federal Communications Commission and the Securities and Exchange Commission could revisit measures adopted by the Obama team, from so-called net neutrality regulations to some of the rules implementing the financial reforms adopted in response to the financial crisis of 2008.

The groundwork for transitioning from campaign mode to governance began within hours of the results being posted, as Trump’s teams fanned out across government agencies on Wednesday to meet with Obama Administration officials and prepare for January 2017.

The lame duck session: Hardly a reliable test of what’s to come

 Congress returns for its “lame duck” session on November 14. The election results have eviscerated President Obama’s ability to accomplish his remaining goals, including adoption of the Trans-Pacific Partnership and the confirmation of Merrick Garland to the Supreme Court. An emboldened Republican Party will likely postpone the more important policy decisions for the arrival of Trump a few weeks later and do little more than pass legislation to fund ongoing government operations and avoid a shutdown.

The new Congress: Republican dominance

The 115th Congress convenes on January 6, 2017, and—for the first time since 1953—a new Republican President will take power with his party controlling both houses of Congress.

Republicans will control the Senate by a narrow majority, leaving Senator Mitch McConnell of Kentucky in charge of the chamber as Majority Leader. While he has control of his caucus, many Senators have a hostile relationship with Trump. Several were highly critical of him throughout the campaign, including his primary opponents, and Trump has previously promised retribution. For their part, Senate Democrats will be led by Senator Charles Schumer of New York, although the shock of their loss will scramble party leadership outside of the chamber. Given the importance of white working-class voters to Trump’s victory, Democrats like Ohio’s Sherrod Brown will likely become more prominent; Senators Bernie Sanders and Elizabeth Warren may also see their influence increase further. Falling far short of the 60 votes necessary to overcome a filibuster, the 51 Republicans, if unified, will need to find at least nine Democrats for passage of major new legislation. Schumer’s ability to keep Democrats in alignment will offer the party its best hope of impeding any major initiatives that the party does not like.

In the House of Representatives, Republicans will retain power by a narrower margin. The caucus will be more conservative but with greater power to implement its party’s agenda, potentially mollifying some internal divisions while exacerbating others. Many party activists are angry at House Speaker Paul Ryan for what they perceive as insufficient support for Trump during the campaign and—potentially with Trump’s support—may seek to oust him from his position as Speaker. On the Democratic side, Minority Leader Nancy Pelosi faces criticism from her members for the party’s overall poor electoral performance. Although she has tightly controlled her caucus for more than a decade, she may face pressure to step aside.

Despite these internal tensions, it is almost certain that the Republican Congress will aggressively push forward with a highly conservative agenda. What is not clear is how much it will reflect the views of President-elect Trump. Indeed, Trump’s own personal history of social liberalism and his prior comments on issues like immigration are in tension with the persona on which he campaigned.

The new Administration: Defining the Trump agenda

As the new administration begins to take shape, one immediate focus will be on President-elect Trump’s choices to fill more than a dozen cabinet positions, senior White House staff roles, agency leadership posts and several hundred sub-cabinet jobs. The transition will be messier than it would have been had Clinton won, as most Obama appointees will leave by January 20 without waiting for replacements and it will take more time to review and obtain security clearances for those who have not served in government before.

The nominees for top posts – such as the Attorney General and the Secretaries of Treasury, State and Defense – could be named within weeks. Several selections are likely to come from the ranks of former lawmakers and senior officials from past administrations, although it will be interesting to see how many come from the hundreds of former Republican officials who criticized Trump during the campaign. Regardless of those choices, there will be a major shift away from nearly all the policies and priorities of the Obama Administration.

In fact, much of President Obama’s legislative record is likely to be rolled back, with the Affordable Care Act and Dodd Frank Act almost certain to be the topics of greatest focus. On health care, it remains to be seen whether such action will be as comprehensive as opponents hope. Key provisions, like “no denial based on pre-existing conditions,” have proven popular. In addition, public concerns about drug pricing will be watched by the pharmaceutical industry. While Republican leaders have spent years attacking the Affordable Care Act, there is no Republican consensus on what would replace it and Trump offered no detailed alternatives during the campaign.

Beyond those top Republican priorities, Trump campaigned on a comparatively limited policy platform of questioning international security and economic commitments – such as the Iran deal, NATO defense costs and WTO trade agreements – but in favor of more aggressive steps to fight ISIS and international terrorism. What that means for his agenda as President is still unclear. A 100-day action plan published by the Trump campaign before the election includes a host of priorities, including measures designed to address perceived corruption in Washington, as well as legislative goals such as corporate tax reform that would dramatically cut rates and greater infrastructure investment.  Trump has also supported removing restrictions on energy production, including oil, natural gas and coal, as well as abandoning international agreements on climate change.

Two centerpiece proposals of Trump’s campaign were building a border wall with Mexico and renegotiating or abrogating trade pacts in favor of punitive tariffs. The United States can expect increased anti-illegal immigration policies, including the deportation of illegal aliens who have been convicted of crimes. On trade, Trump has indicated he will label China a currency manipulator and punish American companies that relocate their manufacturing operations to other countries. The future of NAFTA will also be a major issue; the auto industry has pushed their manufacturing operations into Mexico and will be watching closely to see whether Trump makes any immediate moves to renegotiate or withdraw from that agreement.

Beyond these core issues, substantial uncertainty remains about how President-elect Trump will approach mergers and acquisitions, given the tension between his populist campaign rhetoric and long personal history of deal-making. Transactions that take jobs out of the United States or to move major operations offshore could receive heightened scrutiny. Careful review of foreign investments that raise national security concerns by the President’s Committee on Foreign Investment in the United States (CFIUS), particularly involving Chinese buyers, is also expected. On the other hand, Trump’s administration is likely to adopt a free market, deregulatory agenda that is overall more receptive to transactions.

Trump will face a challenge in convincing the international community of his seriousness as a leader and the credibility of America’s regional and global political, economic and security commitments. He also faces no shortage of global crises and conflicts, ranging from tensions between China and its neighbors, to a raging war in Syria, to internal turmoil within the EU. Throughout the campaign, Trump made overtures towards Russia and Putin, which many worry could define his approach to these and other foreign policy challenges.

President-elect Trump faces a daunting challenge as he seeks to move from campaigning to governing and convincing a skeptical country as well as America’s allies of his fitness for the job. The biggest test will be whether he can begin to knit the country back together, as he suggested in his victory speech that he would try to do, calling on the country to “bind the wounds of division.” This sentiment was echoed by Clinton in her concession speech and in statements by Congressional leaders.

Major challenges obviously remain. Although almost two-thirds of Americans do not like Trump, an even greater number believe the country is on the wrong track. Trump’s election was made possible by a groundswell of anger against the “Establishment” – both Republican and Democratic. The U.K. vote to separate from the EU, and the rise of nationalist parties across Europe no longer appear to be isolated incidents, but rather part of a wave of hostility against incumbent governments and fear of globalization.

But as is always the case in American politics, another election is not far off. After a period of self-recrimination, Democrats in Congress and around the country will begin to focus on rebuilding their party’s leadership and positioning themselves for a comeback—first in the 2018 mid-term elections, and then in the 2020 presidential election.