November 15, 2018

What Democratic Control of the House Could Mean for Your Wallet

The Democrats have put together a trillion-dollar infrastructure proposal aimed at everything from broadband to waterways.

But financing remains a problem. Even if the president and Democrats were willing, Senate Republicans would almost certainly object to any plan large enough to make it worth the Democrats’ while, said Rick Lazio, a former Republican congressman who is now a senior vice president at Alliantgroup, a tax-credit consulting firm. “With the economy slowing and deficits climbing,” he said, “I don’t just see Republicans going for a trillion-dollar infrastructure bill.”

Nor is the atmosphere in Washington particularly conducive to cross-the-aisle collaboration. And Democrats may think twice about giving the president a victory before the 2020 election.

A significant slowdown in the economy could always change that calculus. With the effects of the stimulus fading, Mr. Trump has stepped up complaints that the Federal Reserve’s plan to raise interest rates will slow the economy. “If somebody offers him the opportunity to offset that with a spending bill, he would sign it, with no regard for the deficit,” said Jared Bernstein, a senior fellow at the liberal Center on Budget and Policy Priorities in Washington who was an adviser to former Vice President Joseph R. Biden Jr.

Mr. Trump has paid little attention to critics in either party in pursuing a confrontational trade policy. The administration has the power to impose tariffs without congressional approval, and that is exactly what it has done. The 10 percent tariff the president put on $250 billion of Chinese goods in late September is scheduled to increase to 25 percent on Jan. 1. The White House has indicated that it will unveil tariffs on all other Chinese imports — worth an additional $257 billionif talks between the United States and China at the G-20 summit this month fail to produce progress.

Restricting the president’s power on trade would require the approval of the House and a 60-vote majority in the Senate. That is unlikely. The Democrats have traditionally been less enamored with free trade than Republicans. (Their views, however, may evolve as the Republican Party under Mr. Trump continues its shift from free-trade orthodoxy to protectionist measures.)

Congress will have the chance to weigh in on the United States-Mexico-Canada Agreement, which is to replace the North American Free Trade Agreement. The agreement has incorporated a number of provisions — like higher pay for autoworkers — that render it somewhat more palatable for the Democrats, Ms. Mays of PwC said. But the accord could come up for a vote before the Democrats take control, heading off any push by House Democrats for a tougher deal.

Article source: https://www.nytimes.com/2018/11/07/business/economy/house-democrats-midterm-elections.html?partner=rss&emc=rss

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