With their recent victories, President-elect Donald Trump and congressional Republicans received a new mandate to act.
But what does this mandate entail? Hints from the campaign trail provide insight on what this new administration must tackle first.
By reining in executive authority, extending tax relief, cutting federal spending, and slashing red tape, the Trump administration and Congress can usher in a new era of economic prosperity and fiscal responsibility.
Too much power
Reduce executive authority. Pundits and partisans frequently suggested this could be our “last presidential election.” They claimed that if the opposition wins, authoritarianism will prevail and end democracy as we know it. If that’s true, the executive branch wields too much power.
Rather than work with legislators to craft policies and laws, presidents have increasingly issued executive orders and leveraged federal agencies to drive their agendas. Congress has slowly abdicated its constitutional obligations to the executive branch.
As a result, bureaucracy has intensified, especially with President Joe Biden. Federal employment spiked under the current administration. Also, the amount of time invested in the paperwork necessary to comply with federal regulations grew.
Trump can quickly reverse executive overreach by rescinding Biden-administration orders. But this is only a short-term solution: Future administrations can reinstate everything.
Instead, the new administration must work with Congress to legislate long-term legal guardrails — reducing the scope and containing the authority of federal agencies. Reining in the administrative state and slashing red tape will yield tremendous economic growth.
Taxes and growth
Extend tax relief. This will also improve growth. In 2017, Trump signed the Tax Cuts and Jobs Act (TCJA) into law. The economic benefits of these cuts were plentiful.
Under the legislation, Americans experienced significant income gains, higher wages and improved benefits. Two years after TCJA’s passage, real median annual incomes had risen by $5,000 — the biggest increase than the prior eight years.
These financial perks were pervasive. Thanks to TCJA, most Americans received a tax cut. This was especially true in Pennsylvania.
Measuring the impact of these tax cuts, the commonwealth’s Independent Fiscal Office found that nearly all Pennsylvanians of all income levels received a tax cut. The newly elected legislature must prioritize renewing these tax cuts that predominantly benefit individuals and families.
Tax cuts, however, represent only half of the equation. Without addressing excessive government spending, our fiscal future is woefully uncertain.
Reduce federal spending. Poll after poll showed inflation as the leading issue driving voters to the ballot box. To address this concern, Trump and the new Congress must address inflation’s root cause: excessive federal spending.
The injection of trillions of federal dollars into the economy devastated the dollar’s value. Though deceptive politicians and pundits blamed corporations for “greedflation,” research continues to lay most of the blame squarely on excessive spending.
Deficit reduction doesn’t come up often during elections — mainly because the topic leads to uncomfortable conversations, such as entitlement reform.
But, without addressing spending, programs like Social Security will likely face cuts regardless. Projections suggest depleted Social Security trust funds by 2034, leading to a subsequent 23% reduction in benefits.
Voters seem eager to rein in spending. On the campaign trail, Elon Musk, one of Trump’s most generous donors, claimed the president-elect could slash $2 trillion from the federal budget. Though Trump never articulated the same overly ambitious promise, this message of fiscal restraint resonated with many voters.
Now, it’s time for the winning side to govern in a fiscally responsible manner.
Oil and gas
Unleash American energy. Without a doubt, the path to American prosperity begins with Trump following through on his campaign promises on energy. And it starts by undoing the damage inflicted by the current administration.
Biden frequently bragged about record-level gas and oil production during his administration. However, the drilling permits that fueled this production predate Biden.
Federal drilling leases peaked in 2019 — driving the subsequent boom — but have since declined. The Trump administration must reverse this downward trend and return energy permitting to pre-Biden levels.
Trump must also undo Biden’s regulatory overreach. In June, the Environmental Protection Agency unilaterally issued a new final rule imposing draconian and unrealistic carbon-capture mandates requiring yet-to-be-invented technology.
Notably, Biden “paused” liquified natural gas exports, forcing American allies to rely on authoritarian countries like Russia for their energy needs.
Biden, moreover, stalled the permitting for the Keystone XL pipeline. The Trump administration must begin what it started by green-lighting this project.
American oil and gas companies struggle to get their products to market. Infrastructure like this pipeline will improve our energy sector’s economic viability.
Energy production is especially important for Pennsylvania. As a top energy-producing state, Pennsylvania already has a robust comparative advantage. Growing the U.S. energy sector will provide prosperity and opportunity for our struggling economy.
Nathan Benefield is the senior vice president of the Commonwealth Foundation.
This post was originally published on here
