With a tumultuous 2016 behind us and potentially big changes coming in 2017, Robert Burns Scottish poem, Auld Lang Syne, echoes through the air. “Should old acquaintance be forgot, and never brought to mind? Should old acquaintance be forgot, and auld lang syne?” When listening to this song and thinking about this country moving into 2017, one of the first things that comes to mind is the continued state of deep bipartisanship within Congress. It seems as though the Republican and Democratic parties have spent the past eight years digging in their heels against each other in pursuit of their own self-interests, and it’s been on full display to the American public. Will they set aside their differences and remember why they were placed into power, for old times’ sake? In the third verse of Burns’ poem it goes on to say, “We two have run about the slopes, and picked the daisies fine; But we’ve wandered many a weary foot, since auld lang syne.” Indeed, there have been a few moments of cooperation between parties, but all too many moments of dysfunction and inaction that leave us all weary.
Historical Reference – Although the United States has been considered a two-party system throughout its history, the Founding Fathers didn’t intend it to be so. James Madison wrote about the dangers of factions forming between citizens to the detriment of the republic in The Federalist Papers in 1787, prior to the ratification of the United States Constitution. Madison defines a faction as “a number of citizens, whether amounting to a minority or majority of the whole, who are united and actuated by some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the permanent and aggregate interests of the community”. Although partisanship was not the intention of the Founding Fathers, Madison believed it was inevitable due to human nature. And therefore checks and balances are put into place, as “the federal Constitution forms a happy combination in this respect; the great and aggregate interests being referred to the national, the local and particular to the State legislatures.” Or in other words, a “happy combination” of a democracy and a republic. (See full text of The Federalist Papers: No. 10 here)
As the 115th Congress convenes in Washington and presses forward into a new year and an all new era, several major challenges will present themselves:
Affordable Care Act “Repeal and Replace”
- Senator Rand Paul, “argues that keeping popular provisions of President Barack Obama’s signature health care law, while eliminating less popular, structural pieces, would ‘only accentuate the bankrupting of the insurance industry’… Paul explained that Republicans needed to vote for a complete repeal of Obamacare, while simultaneously voting on an adequate replacement. ‘As we repeal Obamacare, we would be wise to vote on its replacement at the same time,’ Paul wrote.” (Read full article here via CNN Politics)
Immigration reform
- “While Trump`s large-scale immigration efforts are unlikely to meet with success in the face of practicality and resistance, smaller steps may succeed.” (Read full article here via Forbes)
Tax Reform
- “Congressional Democrats say they’ll try to thwart Republican plans to overhaul the U.S. tax code by portraying them as a boon for the rich that betrays President-elect Donald Trump’s campaign promise to fight for working Americans.” (Read full article here via Bloomberg Politics)
Potential Disruption of Foreign Trade Agreements
- “To be sure, Trump is right to criticize China for unfair trade. A vigorous and effective approach is needed to deal with Chinese protectionism. What’s more, there are a series of practices, currently in force in China or in draft form, that are unacceptable: theft of intellectual property; techno-nationalism in the form of policies and measures designed to replace foreign goods with domestic substitutes; state-owned and state-influenced companies as unreliable business partners or unfair competitors; and Chinese government subsidies to domestic industries of a scale never seen before in world history. All of these are challenges for the incoming administration.” (Read full article here via Fortune)
Military and Foreign Policy Shift
- Regarding the newly appointed secretary of state, Rex Tillerson: “What price is to be put on ‘US values’ – human rights, and what is the rate of exchange of those objectives with national security? There will be no shortage of opponents and rivals, in his own administration and probably in his own department, who will be counting minuses where he sees pluses or using entirely different units of measurement… In the many global crises that await Tillerson and all those still to come that will rear up in his face, there will be a tangle of interlocking interests that defy ‘deal making’.” (Read full article here via The Guardian)
Cybersecurity
- “A major Defense Department initiative to protect the military services’ computer networks with a shared system of regionalized cybersecurity centers will face new scrutiny in 2017, both from Congress and from the department’s inspector general… ‘In sum, although the DoD has taken steps to increase cybersecurity through offensive and defensive operations and build its Cyber Mission Force, significant challenges remain,’ the IG wrote. ‘The DoD needs to continue to focus in areas such as maintaining a skilled cyber workforce, developing and using cyber capabilities, and integrating cyberspace operations into command plans.’” (Full article here via Federal News Radio)
And the lofty goal of spending $1 trillion on American infrastructure
- “President-elect Donald J. Trump’s $1 trillion investment plan, which relies heavily on public-private partnerships, sidesteps the unpopular fuel tax hikes, the near-impossible increase in general spending, and the sticky red tape of business tax reform that doomed President Barack Obama’s infrastructure agenda. The Trump team is even reportedly eyeing an infrastructure “task force” to help realize the president-elect’s agenda. But neither the plan nor the task force aimed at buttressing it can avoid the opposition of the president-elect’s own party for increased spending that doesn’t come from cuts elsewhere, more borrowing, or higher taxes.” (Read full article here via the Journal of Commerce)
Plenty of uncertainty awaits in the coming weeks and months as President-elect Donald Trump takes office, Republicans take control of both the House and Senate, and a new agenda takes hold. In our next segment on this topic, we’ll take a look at how each of these issues in focus might effect government spending and contract activity as the Trump era begins.
