Trump: The Good, the Bad and the Ugly

(Author’s note: This is neither an endorsement nor a criticism. It is an outline of the events of the first six months of the Trump administration.)  

The stock market is at an all-time high, the unemployment rate is at the lowest level in a decade, housing starts and home sales are strong, and mortgage rates and interest rates remain low. These would be considered wins for any new administration.

However, controversies surrounding Russia’s involvement in the election, the fate of Obamacare and the President’s own tweets have overshadowed positive developments with the economy.

So what has the Trump administration done for the economy and businesses?

The Good
Despite what critics say, there is good news to come out of the Trump administration. It is evident from the strong performance of the stock market that Wall Street views this as a business friendly administration. Among the promises made by the administration that may help businesses are:

• Resurrecting the Keystone Pipeline project and reversing the Obama administration’s regulations on the coal industry.  However, it remains to be seen whether the promised lower energy costs and increase in jobs will be realized in the United States, offset environmental concerns or have an impact, direct or indirect, on NH’s economy and energy needs.

• Changing course on President Obama’s regulatory initiatives, which would loosen some of the regulations that were viewed as being unfriendly to business and federal contractor agreements. Those include reversing the rule change to establish IRA-based payroll deductions for employers who do not offer retirement plans.

• The executive order that requires every new regulation adopted by federal agencies to coincide with the elimination of two other regulations. Exactly how that will work is a bit of a mystery.

• Enhanced immigration enforcement efforts, especially for those who commit violent crimes. This is more of a public safety issue, but it does have an indirect impact on business.

• A push to repeal and replace the Affordable Care Act. While employers may applaud the repeal of onerous ACA regulations in the hope that healthcare premiums may slow down, if not decrease, questions remain as to what a replacement will include and the impact on businesses. These questions have stymied GOP efforts to repeal and replace.

• The administration has signaled that aspects of the ACA would remain in place or under a new law, including no annual or lifetime limits on benefits, coverage for dependents up to age 26 and no pre-existing condition barriers to coverage.
• Appointments to the National Labor Relations Board with more employer friendly board members.

• Appointment of Neil Gorsuch to the Supreme Court, which should end the 4-to-4 deadlock in cases and permit the court to address cases and issues that
affect businesses.

• Proposed tax rate changes (cutting the corporate rate to 15 percent and individual tax rates to three brackets), which could encourage more investment in U.S. businesses and stimulate consumer spending.

• Proposed increased investment in infrastructure and defense spending, which could be good for businesses in those industries.

• A fresh look at tax credits and grants for training and apprenticeship programs to help businesses prepare the next generation of skilled workers.

The Bad
Despite what his supporters say, things are far from rosy in the Trump administration, and some of the issues that could raise concerns for businesses have flown under the radar. They include:

• The reversal of the Obama administration’s “blacklisting” requirement that federal contractors disclose their history of labor violations. That rule was intended to encourage contractor compliance with workplace laws in exchange for eligibility to participate in federal contracts.

• The proposal to eliminate funding for the National Endowment for Humanities in the 2018 federal budget. While some may applaud this funding decision, the absence of funding for the arts could have a negative impact and perhaps an indirect cost to the business community, who may be called upon for additional support.

• The proposed privatization of infrastructure, especially the air traffic control system, and the apparent dissention within Trump’s cabinet to that proposal.

• The reversal of Obama-era requirement for the Social Security Administration to turn over to Department of Justice information about individuals with disabling mental illness for a registry of those not allowed to buy a gun.

• The campaign-like furious rhetoric makes conciliation with Democrats and within Trump’s own party more difficult and is stalling many initiatives.

• Those seemingly endless tweets.

The Ugly
And then there are the decisions and pledges that continue to stir up controversy:

• The U.S. Department of Labor’s waffling has stalled pending changes to over time exemptions, which continues to disrupt workplaces dealing with exempt and non-exempt classifications.

• President Trump’s threatened increased enforcement of federal drug laws, especially in states where recreational marijuana has been approved by voters.  This could set up a potential conflict with several states where pot is legal, but in the meantime, it complicates workplace drug and alcohol policies.

• Slow walking employment-related visa petitions at a time when employers are having a hard time filling skilled positions.

• Confusing messages from the President regarding paid family leave programs and childcare credits and how they will impact the workplace. Employers are unclear as to the costs and potential benefits of these programs.

• The U.S. Department of Labor has announced more aggressive enforcement of immigration laws, including prosecution of employers and individuals found to have engaged in visa fraud and abuse. This is a cause for concern for some employers.

• President Trump’s reversal of the Obama administration’s limits on states drug testing applicants for unemployment benefits. Unemployment benefits are a safety net; while there is abuse in the system, drug testing could be a barrier to individuals receiving benefits while they seek employment.

• Rejecting the Obama administration’s white papers on independent contractor classification and joint employer status. The problem is white papers were built on well-established laws, rules and case precedent from the IRS, U.S. Department of Labor and the Equal Employment Opportunity Commission. Unless those agencies change their positions and decades of precedent, there will be even more confusion on these issues and potential exposure for employers.

What’s New Locally?
While all eyes have been on Washington D.C., there’s plenty of issues that employers should be tracking on the home front.

The Sununu administration is clearly pro-business in its focus. You would think that, just like in Washington, the governor would have an easier time getting his agenda passed with a Republican House and Senate. Just like in Washington, that is not so.
Infighting between various camps within the majority party have slowed the legislative process. A few employer-friendly workplace initiatives that have had some traction so far include:

• Reductions in the Business Profits Tax and Business Enterprise Tax;

• Elimination of the Energy Consumption Tax;

• Full-day kindergarten, which could have a positive impact on working parents;

• A study of paid family leave (However, that was retained in committee);

• Minor changes and concessions regarding employer payroll practices, hopefully signaling more meaningful employer-friendly wage and hour law changes ahead.