In a speech before the Economic Club of New York, Donald Trump announced six economic policy priorities for a potential second term in the White House:
Despite a heavy emphasis on populist rhetoric, particularly with respect to trade and industrial policy, the balance of the policy priorities were more in the vein of traditional conservative economic policy than otherwise.
The most conspicuous domestic policy achievements of the Trump administration were freezing the growth of the regulatory state and the enactment of the Tax Cuts and Jobs Act (TCJA). With respect to regulation, the Trump administration’s legacy stands in stark contrast to the Obama and Biden presidencies. Under Trump, net regulatory costs were essentially flat. In eight years, the Obama administration finalized $890 billion in regulatory costs. In less than a full term, the Biden administration has issued nearly $1.7 trillion in new regulatory burdens. Trump correctly identified the current administration’s penchant for heavy regulation as a significant counterweight to economic growth, and undoing the near $2 trillion regulatory tax increase under the Biden administration would materially improve the economic outlook for the U.S.
On taxes, President Trump committed to making the TCJA permanent. Among the most significant elements of the TCJA was reducing the corporate tax rate from 35 percent to 21 percent. In his speech on Thursday, Trump pledged to make the TCJA permanent and reduce the corporate rate to 15 percent. Reducing the corporate rate led to improved investment in the U.S., improved growth, wages, and stopped the trend of American companies fleeing U.S. shores in its tracks.
On these two pro-growth agenda items, Trump’s commitments are at odds with some prominent populists claiming to speak for the “new right.” Oren Cass of American Compass has rejected the merits of reducing red-tape, and has embraced a more activist regulatory state. He has likewise rejected the merits of the TCJA, and has called for its expiration. Indeed, on these two signature policy achievements under the Trump administration, Oren Cass very much parts company with Trump, decrying an agenda of “just more tax cuts, deregulation…” in a recent media appearance.
Even on more mundane policy proposals, Cass departs from Trump. Trump would repeal the Inflation Reduction Act, which has showered the Biden administration’s favored constituencies with public subsidies that are ballooning in cost. But this is precisely the sort of public largesse supporters of industrial policy celebrate, and indeed Cass credited the IRA with helping set off a construction boom. To be sure, the sixth prong of Trump’s agenda, which embraces protectionism and tariffs, is beloved by populists like Cass. It’s also, unsurprisingly, the policy proposal most likely to make America poor, not great.