The New York real estate mogul Donald Trump defied all conventional wisdom by winning the GOP presidential nomination contest, besting more than a dozen others, including several political heavyweights. Though he is the official GOP nominee, Trump has eschewed providing details on many issues, instead broad outlines of a plan. However, the outspoken reality TV star has provided some clues on his banking policies.
Too Big to Fail'
One of the biggest surprises was Trump’s embrace of a return to the Glass-Steagall Act. During the early days of the Republican National Convention in July, Trump’s campaign engineered a call for a return to the Depression-era law as part of the official platform.
“We also call for reintroduction of the platform of Glass-Steagall so that would create barriers between what the big banks can do and avoid some of the crisis that led to 2008,” said Paul Manafort, Trump’s then campaign director, on July 18. “The Obama-Clinton years have passed legislation that has been favorable to the big banks, which is why you see all the Wall Street money going to her."
The move caught Republican lawmakers off guard, with many saying they continue to oppose restoring the law that separated commercial and investment banking. But it’s not clear how committed Trump is to Glass-Steagall. While it is part of the official platform, the candidate himself has never talked about it. He had previously said he disagreed with the idea of breaking up the big banks — something that would happen if Glass-Steagall were restored.
Trump has separately called for the repeal of the Dodd-Frank Act.
Trump said on Aug. 8 that if elected president, he would put a temporary moratorium on new agency regulations. In a speech, he said “overregulation is costing our economy as much as $2 trillion a year.”
Additionally under Trump’s plan, every federal agency would draw up a list of regulations that are unnecessary and do not improve public safety and repeal them.
Trump’s plan was met with skepticism from financial industry observers, who suggested it would be difficult for the president to stop independent agencies — like the banking regulators — from enacting new regulations.
More generally, Trump has repeatedly said that he views recent regulations as harmful.
"We will make America the best place in the world to start a business … we will get rid of these horrible regulations that make it impossible to do business in this country," Trump said during a June economic policy speech in Monessen, Pa.
Trump told The Hill newspaper on Oct. 14 that "under Dodd-Frank, the regulators are running the banks. The bankers are petrified of the regulators. And the problem is that the banks aren't loaning money to people who will create jobs."
Still, in an earlier interview with Time magazine, Trump said there "are aspects of" Dodd-Frank "you could leave," though he did not specify which ones. When asked specifically about the Volcker Rule, he praised former Fed Chairman Paul Volcker, and suggested he approved of the rule.
"Well, I'm not sure if he likes it, but … if he's happy, I'm happy," Trump said. "He was a terrific guy. I've met him a few times. And I thought he was terrific. But I think his policy and his demeanor — there was something very solid about him."
Trump has been consistently critical of the role of campaign donations in shaping politics, arguing that politicians are effectively "bought" by the firms that give them money. Indeed, part of Trump's appeal to voters is that he didn’t accept donations during the primary process. He has subsequently begun fundraising, though he has not received much money from the financial industry.
During the campaign, Trump has criticized Clinton for accepting money from firms like Goldman Sachs.
During a GOP primary debate on Jan. 17, Trump noted that then rival Sen. Ted Cruz had not properly disclosed a loan from Goldman (where Cruz' wife works). Campaigning in Iowa later the same week, Trump savaged Cruz, over the issue, arguing Cruz hid the loan.
"He didn't do it purposely because what he wanted to do is say, 'I will protect you from Goldman Sachs, I will protect you from CitiBank... and I'm going to protect you from these banks.' And then he's borrowing from the banks," said Trump. "And, by the way, he's got personal guarantees, and he's got low-interest loans, all low-interest. And now he's going to go after Goldman Sachs? It doesn't work that way. Goldman Sachs owns him. Remember that, folks: They own him."
Trump has also been critical of capital gains tax breaks for hedge funds and other securities firms.
"They're paying nothing and it's ridiculous. I want to save the middle class," he said in August on CBS's "Face the Nation." "The hedge fund guys didn't build this country. These are guys that shift paper around and they get lucky."
Trump has taken numerous shots at Sen. Elizabeth Warren, D-Mass., the founder of the CFPB, but he has not specifically addressed the agency itself. Most political observers believe Trump would be open to Republican efforts to dismantle or change the agency — but the candidate himself has not endorsed such a plan.
While Trump has praised Volcker, he has sharply criticized current Fed Chair Janet Yellen. Echoing criticism from other GOP presidential candidates, Trump has accused Yellen of purposely keeping interest rates low for political reasons.
"Janet Yellen is highly political and she's not raising rates for a very specific reason," Trump said in a speech on Nov. 3. "Because Obama told her not to because he wants to be out playing golf and other things a year from now and he wants to be doing other things and doesn't want to see a bubble burst during his administration."
He has said that Yellen should have raised rates earlier, but that when she does so in the near future "a lot of bad things are going to happen."
Trump has released a detailed tax proposal, though it has changed during the campaign to more closely conform with House Republicans’ plans.
- Individual income tax: Trump initially said he would consolidate seven brackets into four: 0%, 10%, 20% and 25%. The top rate would be lowered from 39.6% to 25%. He would increase the standard deduction to $25,000 for singles and $50,000 for married filing jointly; the alternative minimum tax and net investment income tax would be eliminated. Carried interest would be taxed as ordinary income. But Trump changed course in August, instead embracing House Republicans tax rates of 12%, 25% and 33%.
- Capital gains: The top rate for long-term capital gains and qualified dividends would be 20%. Carried interest would no longer receive capital gains treatment.
- Corporate income tax: His plan would reduce the rate from 35% to 15%. According to Trump, the lower rate would make corporate inversions unnecessary. The Trump plan ends tax deferral on overseas corporate income while enacting a one-time deemed repatriation tax of 10% on all foreign profits currently deferred. It would tax pass-through entities (LLCs, S corporations, sole proprietorships, and partnerships) at 15%, the same rate as corporations would pay. It also eliminates the corporate alternative minimum tax.
- Estate tax: Trump would eliminate the estate tax.
Health Care and Employee Benefits
Donald Trump has called the Affordable Care Act a "complete disaster" and said it needs to be repealed and replaced. "What I'd like to see is a private system without the artificial lines around every state," he told Fox News. His other specific recommendations include:
- Letting Americans purchase health care across state lines.
- Creating "a universal 'market-based' plan that would offer a range of choices," according to a Trump spokesperson. "Mr. Trump will be proposing a health plan that will return authority to the states and operate under free-market principles. Mr. Trump's plan will provide choice to the buyer, provide individual tax relief for health insurance and keep plans portable and affordable. The plan will break the health insurance company monopolies and allow individuals to buy across state lines."
- Suggesting that rich taxpayers should sacrifice the benefits of Social Security for the good of the country.
- Opposed massive cuts to Social Security, Medicare and Medicaid. "Every Republican wants to do a big number on Social Security, they want to do it on Medicare, they want to do it on Medicaid. And we can't do that. And it's not fair to the people that have been paying in for years and now all of the sudden they want to be cut," he told a GOP summit in April.
- Supports a low minimum wage. "Having a low minimum wage is not a bad thing for this country," he said.