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The US Congress can walk and chew gum

By Michael Knox - posted Thursday, 13 July 2017


One could be forgiven for thinking that all that has been happening during the Trump administration is that Trump has been running away from Russian enquiries or running to them.

In fact, a lot has been happening and it has been happening in the US Congress. Under the US constitution, Speaker of the House Paul Ryan is in a position which is similar but not identical to that of our Prime Minister. Like our PM, Paul Ryan is the most powerful person in the House of Representatives. He is elected by the party in the US House of Representatives which commands the most seats.

Under the US constitution, the House of Representatives holds the authority over money bills. What is different about the US system is that the Executive (that is to say the White House) has control over relations with foreign States.

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Under the Obama Administration, the White House developed considerable power over the domestic economy as well. This power was developed and exercised through regulation. We should remember that Barack Obama was a highly qualified academic lawyer, who lectured in constitutional law for many years before entering politics. His understanding of the law and how to govern by regulation was unsurpassed in recent US history. The result of this is that the White House developed a large administrative bureaucracy which governed through regulation.

The style of the Trump administration is entirely different. As a businessman, Trump ran a very large organisation with a very small administrative staff. He tended to delegate decisions to operational roles in a fairly flat and non-bureaucratic organisational style. Trump, unlike Obama, has a majority in both the House of Representatives and the US Senate. He has chosen to put much greater emphasis on the House of Representatives as a source of policy formation and decision making. This means that what is happening in the Trump administration becomes very much a question of what is happening in the US Congress.

What has been happening in the US Congress?

In a speech on 30 June, the Speaker of the House Paul Ryan attempted to detail what the US Congress had achieved in the first half year of the Trump Administration. As well as undertaking enquiries, the US Congress is also passing important legislation. As Paul Ryan has said "the Congress can walk and chew gum at the same time".

The major items that have already been signed by President Trump and already passed into law include:

Land mark veterans reforms: The Department of Veterans Affairs, which administers services provided to former military personnel has seen the largest reforms since 2013. This legislation boosts accountability, improves services and leads to better care for US veterans and their families.

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Record regulatory relief: The House of Representatives has passed 14 Bills, striking down regulations enacted under the Obama Administration. These bills have been signed by President Trump. Paul Ryan notes that according to the American Action Forum, the repeal of these 14 rules eliminated $3.7 billion in total costs to US taxpayers. It eliminated $1.1 billion in administrative burdens and 4.2 million paperwork burden hours.

Stronger border security: The House of Representatives has provided and the President has signed an extra $US1.5 billion in resources for border security. This means more agents, enhanced technology and updated infrastructure.

More Defence Funding:The House of Representatives has delivered a $US21 billion increase in Defence spending.

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Disclaimer

The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual’s relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so. Those acting upon such information without advice do so entirely at their own risk.

This report was prepared as private communication to clients of Morgans and is not intended for public circulation, publication or for USe by any third party. The contents of this report may not be reproduced in whole or in part without the prior written consent of Morgans. While this report is based on information from sources which Morgans believes are reliable, its accuracy and completeness cannot be guaranteed. Any opinions expressed reflect Morgans judgement at this date and are subject to change. Morgans is under no obligation to provide revised assessments in the event of changed circumstances. This report does not constitute an offer or invitation to purchase any securities and should not be relied upon in connection with any contract or commitment whatsoever.



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About the Author

Michael Knox is Chief Economist and Director of Strategy at Morgans.

Other articles by this Author

All articles by Michael Knox

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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