There is no reason to expect any change in the Beltway distribution of power, said Chip Roame, managing partner of Tiburon Strategic Advisors.
Speaking during a regular conference call Thursday, Roame said President Donald J. Trump is on track for another four-year term.
“I think Trump gets re-elected and the Republicans hold the Senate and Democrats hold the House,” Roame said. “So I think we’ve got four more years of the stagnation that we’re seeing right now.”
Roame cited Trump’s numbers in the Gallup tracking poll, which recently hit 49%, the best of his term to date. In a good economy, any incumbent president is hard to defeat, he added.
“I think a lot of pundits will tell you that where the economy goes is where the election will go,” Roame said.
A potential trouble spot for Trump is the rising number of registered independents. According to Gallup, 46% of Americans claim independent registration, with Republicans and Democrats claiming 27% each. The number of independents stood at 37% eight years ago.
Evolving Consumer Legislation
Election politics aside, Roame predicted “evolving consumer legislation” in the next presidential term. That means continued changes to the Affordable Care Act, immigration reform and tax law updates.
“Financial institutions’ laws as a general rule are going to be relaxed,” Roame said. “Things like Dodd-Frank are going to be watered down over the next few years.”
Passed in 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act targeted the sectors of the financial system that were believed to have caused the 2008 financial crisis, including banks, mortgage lenders, and credit rating agencies.
Critics of the law argue that the regulatory burdens it imposes could make United States firms less competitive than their foreign counterparts. In 2018, Congress passed a new law that rolled back some of Dodd-Frank’s restrictions.
Financial services will see regulations such as the Securities and Exchange Commissions’ Regulation Best Interest continue to be developed, Roame said. A survey of Tiburon CEO Summit attendees shows that far fewer CEOs believe a fiduciary standard is inevitable.
Two years ago, 89% of summit attendees said a fiduciary standard for all taxable accounts would be in place within five years. In the most recent survey, that figure dropped to 60%.
The only other thing to watch is the carried interest rule, Roame said. Carried interest refers to a longstanding Wall Street tax break that let many private equity and hedge fund financiers pay the lower capital gains tax rate on much of their income, instead of the higher income tax rate paid by wage-earners.
“I think the carried interest rule is one worth watching,” Roame said. “That would fundamentally change the private equity world. Some of the others I don’t think are going to get changed anytime soon, especially if Trump gets re-elected.”
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at firstname.lastname@example.org. Follow him on Twitter @INNJohnH.
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