When Donald Trump settles into the Oval Office in mid-January, his administration is expected to roll out policy changes on several fronts: taxes, health care, engaging with Asia, environmental regulation and so forth. While some actions will follow predictable paths, such as the attempt to recast health insurance policy, others will meet obstacles from either market realities or rule-making processes, or bring surprises, such as a new Asia pivot, according to the deans of Wharton, Penn Engineering and Penn Law.

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Donald Trump by Gage Skidmore on 2011-02-10 12:47:12
Donald Trump

According to Wharton dean Geoffrey Garrett, future U.S. leaders including Trump face two big challenges. One is to “increase growth rate from 2% to north of 3%, back to where it has been historically has been since World War II,” and the other is to ensure that “the benefits of that growth are more widespread.”

Trump’s policies would bring short-run economic gains that could last as much as a decade but end up saddling the government with far too much debt, said Garrett. He noted that stagnant incomes for many Americans over the past 15 years played a big role in Trump’s win. The takeaway from that for the future is to ensure equitable sharing of the gains from economic growth, he added.

Trump will back a conservative jurist to fill the Supreme Court vacancy created by the death last year of Justice Antonin Scalia, predicted Theodore Ruger, dean of the University of Pennsylvania Law School. He noted that Trump had said that he would make his pick from a shortlist of candidates he released last May. That list includes individuals who were selected by former president George W. Bush and who were confirmed but are currently sitting on the lower federal bench or state Supreme Courts.

“You can’t see technology the way you can see a factory in China or an immigrant in a job. So it’s harder to rally against technology politically.”–Geoffrey Garrett

“We have a fair degree of certainty that we will have a mainstream – in terms of high pedigree – but very conservative jurist,” said Ruger. “If that’s the only appointment that will be made in the next several years, the key doctrine will not change all that much, because Justice Scalia was already voting in that direction.” But if Trump were to be reelected for a second term, “we might see some real doctrinal shift,” he added, referring to the possibility of three more vacancies that could arise over the next eight years.

According to Penn Engineering dean Vijay Kumar, one area that could see unkind cuts is federal funding for R&D in science and technology. He noted that such funding has been falling steadily even with the 2008 stimulus by President Obama. Further, he pointed out that federal funding for R&D is currently only 0.6% of GDP, a far cry from the 2% during the “Sputnik Era” of the 1950s through the 1970s (so called for the frenetic space research activity triggered by the Soviet Union’s launch of the Sputnik satellite in 1957). Private companies have stepped in to pick up the slack in federal R&D funding to some extent, he added. “[But] I worry about the [funding] for the long moonshot projects that were funded by federal R&D.”

Garrett, Ruger and Kumar shared their perspectives in a panel discussion titled “Predicting the Future: What Will the Next Four Years Bring?” at Penn Engineering on November 30, 2016.

Infrastructure Investments

Trump’s infrastructure investment plans have every chance of becoming reality because “a big infrastructure spend” has bipartisan support, said Garrett. However, he called for careful consideration on three aspects. First, he suggested there should be a balance between public and private sector investments.

Second, Garrett emphasized the need to focus on longer-term productivity gains and not just on job creation in the short-run. While typical infrastructure projects would include roads, bridges, dams and the like, he proposed ventures such as 5G telecom networks or fiber-to-the-home projects that would boost productivity in the long run. Third, he had concerns about how the Trump infrastructure plan would be funded. “The Republicans would like to fund it through tax breaks, but that could become political football,” he said.

Health Care, Immigration Reforms

Trump also will carry out his plan to phase out the 2010 Affordable Care Act (ACA), otherwise known as Obamacare, predicted Ruger, who also teaches health law and pharmaceutical regulation. “If we were to catalog predicted policy changes after mid-January, I expect substantial repeal, reduction and defunding of important parts of the ACA,” he said. He noted that Trump’s pick of Tom Price as the next secretary of the department of health and human services “solidifies” that expectation. A physician and a Congressman from Georgia, Price has been a staunch opponent of the ACA. After a statute is passed to change the ACA, the government might allow a two-year period for people to continue to get health insurance from state exchanges before an alternative system is put in place, predicted Ruger.

According to Ruger, a repeal of the ACA would affect between 10 million and 15 million Americans. Most American workers get their insurance through their employers; an ACA repeal will mostly affect those who are self-employed or work for small firms, others who have preexisting medical conditions or those who earn just enough to not qualify for Medicaid, he explained.

“The rest of the system will keep going, and we will still be dealing with some of the cost control problems that we dealt with before the ACA that the ACA didn’t solve,” said Ruger. As for anticipated changes to the Medicaid program, he expected the Trump Administration to cut back spending, but convert some of that into federal block grants to states, where the latter have discretionary power on where to spend those monies.

On immigration reforms, both Republicans and Democrats agree that the existing H-1B visa program for U.S. companies to hire temporary foreign workers suffers from inequities, said Kumar. Many companies try to game the system and corner as many as possible of the 65,000 H-1B visas the U.S. issues annually to foreign workers, he explained. Trump will take steps to try and level the playing field and prevent manipulation of the visa program, he predicted.

Climate Change and Reality

Trump’s belief that climate change is a hoax will likely run aground when it meets the realities of economics, said Kumar. He offered several data points to make his case: “Electric cars are becoming viable. The cost of batteries is declining by about 12% a year. The cost of solar energy has declined by about 75% in the last five years. The cost of offshore energy has halved over the last three years. The cost of energy generation will be less than the cost of energy distribution, which means we will all produce our own energy.”

“We’ve become ruthlessly efficient in any kind of a production system, whether it is agriculture or manufacturing.”–Vijay Kumar

The Trump team will face obstacles as it attempts to convert into policy its attacks on the Environmental Protection Agency (EPA) and its regulations. For example, regulations on carbon emissions may

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