This week in Trumponomics: The second-term mystery

Rick Newman
·Senior Columnist
·5-min read

What would President Trump do in a second term, if he wins reelection?

Trump hasn’t really said. At his rallies and other appearances, Trump tries to convince his supporters the economy is roaring back, while trying to scare them about a “radical” Joe Biden administration if his Democratic rival wins. But Trump doesn’t detail his own agenda the way he did in 2016, when he promised to build a border wall, launch a trade war with China and bring back lost jobs.

Trump’s campaign website list more than 50 bullet point goals for a second term, such as “return to normal in 2021” and “cut prescription drug prices.” But these are generalities with no details, and Trump quickly dropped some of the ideas he floated before the 2018 midterm election, such as a new middle-class tax cut that never materialized.

To suss out what a second Trump term might look like, the Eurasia Group examined priorities set by “congressional Republicans and appointees at federal agencies,” on the premise that Trump would be more likely to react to proposals by others in his party than offer his own. Top goals would probably be a new coronavirus stimulus bill—though smaller than Democrats would like—along with modest new tax cuts, ongoing deregulation, more trade pressure on China and, of course, more conservative judges.

Forecasting firms such as Moody’s Analytics and Oxford Economics have estimated that Joe Biden’s economic plan would boost growth and employment more than Trump’s sketchy agenda. But they’ve struggled to get a handle on Trump’s plan because it’s not spelled out anywhere. Trump is an underdog at this point, but if he beats Biden on Election Day, voters won’t really know what they’ll be getting in 2021, except more combustible Trumpism. Trump’s vague agenda earns a FAILING grade on this week’s Trump-o-meter, the second lowest.

Source: Yahoo Finance
Source: Yahoo Finance

If Trump beats the odds to win a second term, it would probably be with a Republican Senate but Democratic House. There’s a small chance Trump could win with Democrats taking the Senate, meaning he’d face united opposition in Congress. There’s almost no chance Trump will win with Republicans retaking the House, so he’ll face some opposition at a minimum.

There probably will be another stimulus package either in late 2020 or early 2021, but it will be smaller under Trump than under Biden. As unsuccessful negotiations wound down in late October, Trump had agreed to nearly $2 trillion in new spending, just short of what House Democrats wanted. But Senate Republicans would only go as high as $500 billion. If Trump wins with a full Democratic Congress, a new package could be in the range of $2 trillion. But if Republicans control the Senate, it might end up under the $500 billion ceiling Majority Leader Mitch McConnell has already established.

Trump can take action on trade without Congressional approval, as he did during his first term. Eurasia thinks Trump would prioritize trade in his second term, using tariffs once again to make imports more costly and demand concessions from trading partners, especially China. A “phase two” trade deal with China was supposed to follow the “phase one” deal from January, but China hasn’t yet lived up to its phase-one agreements. Both sides retreated from confrontation during the U.S. election season, but that could end. “The result could be a return to tariff escalation,” Eurasia predicts, “with the president less restrained than in his first term by electoral concerns.”

Senate Majority Leader Mitch McConnell of Ky., flashes his thumbs up as he leaves the chamber at the Capitol after a vote confirming Amy Coney Barrett to the Supreme Court, Monday, Oct. 26, 2020, in Washington. (AP Photo/Manuel Balce Ceneta)
Senate Majority Leader Mitch McConnell of Ky., flashes his thumbs up as he leaves the chamber at the Capitol after a vote confirming Amy Coney Barrett to the Supreme Court, Monday, Oct. 26, 2020, in Washington. (AP Photo/Manuel Balce Ceneta)

Trump wants to cut taxes in a second term, but this seems unlikely unless he makes major concessions to House Democrats to get them to go along. Trump has suggested cutting the payroll tax, but that probably won’t happen because it funds Social Security and Medicare, considered politically untouchable. Trump also hopes to cut the business tax by another point, to 20%, which could probably only happen as part of a new stimulus package that included most Democratic priorities. It’s also fair to ask whether Trump is sincere about pursuing new tax cuts, since he proposed a new tax cut right before the 2018 midterm elections but barely mentioned it afterward.

Trump would also probably deliver more of the same on restricting immigration, promoting carbon energy and cutting regulations wherever possible. His hopes for a big infrastructure bill have become a running joke in Washington, and might be impossible if partisan warfare persists. One thing Trump would be able to continue doing is appointing conservative judges, as long as Republicans retain a slim majority in the Senate, which confirms federal judges. If Democrats take the Senate, they’ll either force Trump to nominate more moderate judges or simply refuse to confirm conservative ones.

As for the coronavirus, arguably the most important problem facing the country, Trump has shown little interest in a federal prevention effort, banking instead on a vaccine. And Congress probably couldn’t force Trump to change, even if Democrats controlled both houses. So a second term for Trump could mean a longer life for the coronavirus pandemic as well, since a vaccine probably won’t be widely available until late 2021. Trump isn’t spelling that out, either.

Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. Confidential tip line: Encrypted communication available. Click here to get Rick’s stories by email.

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