So, what exactly does Goldman Sachs expect out of the Trump administration?
A new report from the bank’s economic research team sheds some light on the bank’s expectations for 2017 and beyond, and given the bank’s connections to Trump’s team, the report carries a bit more weight than some other analysts’ views (no offense intended to other analysts, of course).
Admittedly, much of the report focuses on areas outside of housing.
For example, Goldman Sachs expects, as most do, that the Trump administration will move quickly to repeal Obamacare and to enact tax reforms.
Those moves will involve Congress, where Republicans control both the House of Representatives and the Senate.
But Goldman Sachs notes that there a number of regulatory issues that Trump can address without Congressional involvement.
From the Goldman Sachs report:
The Trump Administration will have significant discretion in revising regulations promulgated during the Obama Administration, subject to a few general constraints: they must follow federal rulemaking procedures, which can often take over a year to finalize a regulation; they must remain within the bounds of the laws Congress has enacted—regulatory actions are generally about filling in the missing details in the laws that Congress has passed; and Obama Administration appointees might continue to serve at independent agencies or commissions after inauguration, as their terms do not follow the four-year presidential cycle. That said, we expect to see the Trump Administration attempt to modify some of the Obama Administration’s regulatory initiatives.
According to Goldman Sachs, there are also a number of moves that Trump can make with the aid of the Republican majority in Congress, including the “reversal of certain regulatory actions.”
Goldman Sachs explains:
The Congressional Review Act allows Congress to overturn recently issued regulations by passing a resolution in the House and Senate with protections similar to the reconciliation process, i.e., limited debate and a simple majority vote in the Senate. This process has rarely been used, because it still requires presidential approval, and presidents are unlikely to sign a resolution overturning one of their own regulatory initiatives.
The exception to this is at the start of the new administration, where a new president has the opportunity to enact legislation overturning some of the prior administration’s most recent regulations. Timing is important: the CRA applies only to regulations finalized within 60 legislative days of the end of the last session of Congress, which the Congressional Research Service estimates covers regulations issued after June 13, 2016.
For such regulations, Congress will have a limited period in 2017 to overturn Obama Administration regulations using this expedited procedure; the exact date depends on a number of procedural issues, but Congress would probably have until sometime in June 2017 to take advantage of this process.
We would expect to see regulations identified fairly quickly in the House, with passage of legislation to overturn several regulations in late January and February. In the Senate, where each resolution of disapproval would still be subject to up to 10 hours of debate, the process would proceed more slowly and would compete for time with more pressing matters, such as presidential nominations, budget legislation, Obamacare repeal, and tax reform.