President Donald Trump pledged Thursday to order the Department of the Treasury to conduct thorough reviews of both the U.S. tax code and the banking regulations put in place following the financial crisis of 2007.
The president is expected to sign an executive order Friday morning at the Treasury that will direct Treasury Secretary Steven Mnuchin and his staff on how to go about identifying areas in the tax code where the government can afford to make reductions. Specifically, the Treasury will be tasked with finding taxes and regulations that add undue burdens for the American taxpayer or exceed statutory authority, Reuters reports.
Trump will also additionally sign two memoranda ordering the review of a few key features of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act enacted under former President Barack Obama.
One of the memoranda will look at the Financial Stability Oversight Committee’s (FSOC) designation process of significantly important financial institutions, commonly known in regulatory speech as “SIFIs.” The other demands a review of the Orderly Liquidation Authority, a government entity charged with laying out how large banks can maneuver through a financial crisis.
Together, the two memos are meant to examine the overall impact of failing financial institutions and whether or not having large safety nets available to them promotes excess risk taking.
Friday’s moves will be a big step forward for the Trump administration in making good on one of its primary campaign promises. Thus far into his first term, the president’s focus has been almost entirely on pushing health care reform through Congress, and, as a result, tax and regulatory reform has largely taken a backseat.
Only following the humiliating defeat of the American Health Care Act (AHCA) in March, did it look like the president might be willing to move onto tax reform in order to get a major bill through Congress in his first 100 days in office. “I would say that we will probably start going very, very strongly for the big tax cuts and tax reform. That will be next,” the president told reporters in late-March after the bill failed.
The president changed his tune a few weeks later, telling Fox Business’ host Maria Bartiromo on April 12 that: “We’re going to have a phenomenal tax reform (plan), but I have to do healthcare first. I want to do it first to really do it right.”
Continued failures by Trump and Republican leadership in Congress to put forth an Obamacare repeal bill that conservative and moderate-Republicans can get behind have delayed progress on many other fronts, like financial, regulatory and tax reform. Democrats also remain in unanimous opposition to any form of repeal and replace at this point, so the road ahead appears tumultuous at best. Yet, Friday’s executive actions and memorandums could likely be a kick start to the pro-growth agenda promised on the campaign trail.
Mnuchin promised Thursday the administration promises to release a “major tax reform” package “very soon,” regardless of “whether health care gets done or health care doesn’t get done.”
Speaker of the House Paul Ryan took a different stance than Mnuchin earlier this week Wednesday, hinting that tax reform would get pushed back once again, this time moving the timetable from late summer to sometime in 2017.
“This will be done in 2017, that is our time line, we would like to get it done as soon as possible,” the speaker told reporters Wednesday during a visit to London. “As soon as possible for us is by the end of summer but we’re going to take our time to get it right. We can clearly get this done by the end of summer but if it needs to go a little longer, we’ll do that.”
Neither administration nor cabinet officials have laid out the specific details of their tax overhaul plan, and there different and seemingly ambiguous responses are causing some to fear Trump has yet to lock down a detailed proposal.
Mnuchin will have 180 days to complete the reviews Trump is scheduled to order Friday morning. Until that point, lawmakers are not back in session until the end of their two-week recess on April 27, so no major legislative moves on health care or tax reform are expected until that point.
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