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President Trump’s first foray into legislating did not go well. So following the failure of the American Health Care Act, Trump this week returned to the approach that dominated his first six weeks in office: policymaking through executive action. On Monday, Trump signed an executive order revoking rules for federal contractors that had been imposed under his predecessor, Barack Obama. On Tuesday, he signed another order rolling back many of Obama’s efforts to combat climate change.
Notice the common thread there: “revoke.” In exercising his presidential power, Trump also revealed its weakness: Anything Trump does today can be undone (or perhaps redone) by his successor. Just look at the so-called Mexico City policy, which bars U.S. funding for international groups that provide abortions; for more than 30 years, it has been revoked (by Democrats) and re-imposed (by Republicans) every time the White House has switched parties.
This is not to say executive actions don’t matter. Trump’s orders on immigration, climate change, health care and other issues will have real consequences — good or bad — for millions of Americans. In the case of climate change, in particular, those consequences could long outlast his presidency. But by relying on executive actions to enact key parts of his agenda — including signature issues such as his border wall and travel ban — Trump is leaving his policies vulnerable to quick reversal by future presidents.
Trump is hardly the first president to turn to the quick fix of executive action over the more permanent — but also longer, more difficult and more compromise-filled — legislative process. Obama relied heavily on executive orders, which is why Trump can now revoke them. But what is striking is that Trump is relying on executive actions at a time when passing legislation should be comparatively easy: His party controls both houses of Congress. Past presidents have used similar opportunities to pass signature legislation: the Affordable Care Act under Obama, for example.
Trump could still match those achievements. He has indicated that he plans to move on to tax reform next, possibly while simultaneously pursuing a big infrastructure bill, and there is even talk of reviving the health care bill (more on that in a bit). But time isn’t on his side: As Julia Azari wrote for FiveThirtyEight earlier this year, enacting major policies gets harder after a president’s first 100 days in office. This much is clear: If Trump wants to ensure that his policies outlive his presidency, he will need legislation, not just executive orders, to do it.
Environment: Coal vs. cars
Trump’s executive order rolling back Obama’s climate-change policies has gotten lots of attention for seeking to help the struggling coal industry. (Don’t bet on a revival — environmental regulations have hurt the coal industry, but real enemy is cheap natural gas.) Less noticed, but perhaps just as significant, is how the order favors power plants over the other big source of U.S. carbon emissions: cars and trucks.
To back up: The centerpiece of Trump’s order is an effort to revoke a much-litigated series of Obama-administration rules known collectively as the Clean Power Plan. That plan, which would have sharply restricted emissions from power plants, was a response to a 2007 Supreme Court ruling that found that greenhouse gases count as a potential air pollutant under the Clean Air Act. The ruling paved the way for the Environmental Protection Agency to declare in 2009 that greenhouse gases are a legitimate threat to human health. This “endangerment finding” means the EPA not only has the right to regulate greenhouse gases — it’s actually required to.
The Clean Power Plan wasn’t the previous administration’s only response to the finding, however. Obama’s EPA also put in place strict new fuel-economy standards for cars and trucks. The Trump administration is taking steps to ease those standards, but at the same time it’s using them to its advantage: In a press briefing Monday, a senior White House official told reporters that the Trump administration is choosing to interpret the EPA’s endangerment finding very, very narrowly — as though only cars and trucks contribute to greenhouse gas emissions. Therefore, at least according to the administration, it is under no obligation to restrict emissions from power plants.
Of course, cars and trucks are not the only contributors to greenhouse gas emissions. They’re not even the biggest one. Transportation accounts for 34 percent of U.S. greenhouse gas emissions, according to data from the Energy Information Administration. Power plants account for 38 percent, with most of that coming from burning coal. All of this means that favoring coal could end up providing a way to challenge Trump’s executive order in court, which environmental groups are already doing. It is, after all, pretty easy to show that coal-fired power plants are as big a contributor to the country’s overall greenhouse gas emissions budget as gasoline-powered cars are. If the government is required to regulate one, you could easily argue that it ought to be required to regulate the other.
Health care: Uncertainty is the enemy of affordability
After declaring last week that health care reform was all but dead, a handful of Republicans have begun hinting that there might be some life in it yet. “We’re approaching the Easter season,” Oregon Rep. Greg Walden told Bloomberg. “Some things rise from the dead.” Meanwhile, Health and Human Services Secretary Tom Price testified this week that, repeal or no repeal, he plans to do his part to unravel Obamacare, though he has sent some mixed signals on that front: Insurers want tighter restrictions on when people can enroll, which HHS is in the process of granting. But the department has said little about how it will handle a Republican-led lawsuit that, if successful, could leave insurers running for the exits.
All this uncertainty is bad for the insurance markets established by the Affordable Care Act because in health insurance, uncertainty means price increases. Setting insurance premiums is an educated guessing game that involves divining who will enroll in coverage, how sick those people will be, what kind of health care they will need, and what the government will regulate. On that last matter, the ACA upended the market, demanding not only that insurers cover more services than they had previously but also that they provide coverage to just about anyone who wanted to buy it.
That made deciding how much to charge enrollees a bit of a crapshoot when the Affordable Care Act first passed. Insurers’ predictions of who would enroll and how much they would cost turned out to be overly optimistic during the first three years of the marketplace, leading to a large jump in premium prices in 2017 (when in doubt, charge more). Today, insurers know a lot more about what to expect from enrollees and a lot less about what to expect from the federal government that regulates their industry. But as far as insurers are concerned, uncertainty is uncertainty.
While the marketplaces serve less than 4 percent of all U.S. residents, those exchanges are the public face of Obamacare, and they largely serve people who couldn’t otherwise afford insurance. That gives the markets an outsized importance in the worlds of both politics and health care, and if we see any dramatic price increases in 2018, they would undoubtedly set off a political blame game. It’s hard to see how that will help either side of the aisle, but it will certainly hurt the people who rely on the marketplaces to buy insurance.
Taxes: This won’t be easy
When Treasury Secretary Steve Mnuchin recently suggested that reforming the tax code will be “a lot simpler” than fixing health care, the tax policy world let out a collective guffaw. After all, there’s a reason it has been more than three decades since the last major overhaul of the U.S. tax code, despite near-universal agreement that the existing system is broken. The problem is that every deduction, credit and loophole has a built-in constituency that will fight any attempt at repeal; larger changes of the kind Republicans say they want will encounter even more entrenched opposition.
Moreover, the failure of the American Health Care Act may have made the already difficult job of tax reform even harder. The bill would have eliminated various taxes imposed by the Affordable Care Act, resulting in nearly $1 trillion in lost revenue over 10 years, according to the Congressional Budget Office. But the bill would have reduced spending by even more, resulting in a net reduction in the overall budget deficit. That’s key, because for both political and procedural reasons, it’s much easier for Republicans to pass a bill if it doesn’t add to the deficit.
Now, with the health care bill (probably) dead, Republicans will have to find another way to cover the cost of repealing the ACA taxes, either by cutting spending (hard) or raising taxes on someone else (possibly even harder, especially because the Obamacare taxes fell mostly on the rich). Of course, there is also another option: not repealing the Obamacare taxes. It’s unclear how open Republican leaders are to that option, however. Rep. Kevin Brady, chairman of the House’s tax-writing Ways and Means Committee, recently told reporters that the health care taxes would stay in place until the ACA is repealed. House Speaker Paul Ryan suggested the same thing last week. But Senate Finance Committee Chairman Orrin Hatch this week said he still hopes to repeal the taxes as part of the larger tax overhaul. So much for simple, Secretary Mnuchin.