Cozen Currents: Shock and Awe

January 14, 2025

“While Republicans have taken unified control of the federal government, President-elect Donald Trump is going to lean heavily on an expansive use of executive power from his first day back in the Oval Office as he has neither the inclination nor patience to coordinate with Congress more than is necessary.” — Howard Schweitzer, CEO, Cozen O’Connor Public Strategies

The Cozen Lens

  • President-elect Trump is looking to make a splash on Inauguration Day with plans to sign up to two dozen executive actions in the hours after his official swearing in ceremony.
  • While Republicans control both chambers of Congress, that doesn’t mean that they necessarily have unified interests in terms of either legislative process or substance.
  • As the US’s competition with China has increased in recent years, the executive branch has adapted, with the Commerce Department rising in importance relative to the Treasury Department.

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Trump’s Shock and Awe Campaign

Border Security. The focus of President-elect Trump’s day one “shock and awe” campaign will be the sheer number of executive actions he signs more than it will be on any one specific policy theme, but a plurality of the policy changes will relate to immigration and the border.

  • Following up on a major theme from the campaign, Trump promised in November to kick off his immigration policy agenda with a declaration of a national emergency at the border on his first day in office. In a repeat of 2019, Trump has indicated that he would use the declaration to reprogram Pentagon funds toward construction of the border wall. He is also considering using his emergency authorities to involve the military in deportation logistics and send the National Guard to the southern border. Congress has delegated sweeping authority to declare a national emergency to the president, but advocacy groups have indicated that they could challenge any such action in court.
  • Closing the border itself is reportedly Trump’s top day one priority. Trump advisor Stephen Miller is advocating for an immediate reimposition of “Title 42,” a public health authority that allows for the expedited removal of individuals who cross the border between ports of entry. The president-elect has also made clear that he will quickly bring back the “Migrant Protection Protocols,” better known as the “remain in Mexico” program. Doing so is well within his authority, although implementation would require cooperation from the Mexican government.
  • A rollback of Biden-era immigration policy is also on tap, with Trump expected to quickly rescind Biden-era deportation guidance, replacing it with a directive to prioritize the removal of the roughly 1.4 million individuals with existing deportation orders along with any others facing criminal charges. He has also pledged not to renew Biden’s humanitarian parole programs or Temporary Protected Status for Haitians, although terminating the latter altogether would require an act of Congress.

Tariffs and Energy Production. While the highest volume of day one actions may relate to border security, Trump’s favorite word in the dictionary, “tariff,” and his promise to “drill, baby, drill,” will also feature prominently.

  • Trump could also declare a national economic emergency on day one, giving him broad authority to implement tariffs under the International Economic Emergency Powers Act (IEEPA). As Trump first sought to demonstrate in 2019, tariffs issued under IEEPA can go into effect in a matter of weeks. The transition team has already drafted executive orders that would allow Trump to use his similarly fast-acting powers under Sections 338 and 122 to quickly implement tariffs without congressional approval, although any tariffs imposed under the latter authority would require congressional support to renew them.
  • On the energy front, day one priorities include overturning Biden’s ban on offshore drilling in certain US waters, an end to the pause on US liquid natural gas (LNG) export licenses, and an expansion of lease sales in the Arctic National Wildlife Reserve (ANWR). All three actions can be announced on day one, but it will take months to go through the necessary administrative steps to overturn Biden-era restrictions in the ANWR and to restart LNG export license sales. Trump also plans to quickly announce the end of the Inflation Reduction Act’s electric vehicle consumer tax credit, although only an act of Congress can fully repeal the credit itself.

New Technology and the Culture Wars. Beyond Trump’s core domestic policy agenda, he is considering taking quick action to reset the direction of federal policy around emerging technologies and culture war issues.

  • The crypto industry is pushing Trump to sign at least one executive order on digital assets on his first day in office. Top candidates for action include a directive ordering prudential regulators to stop the “debanking” of digital asset companies or a statement calling on agencies to develop friendlier regulatory guidance toward crypto. Trump also promised to repeal much of President Biden’s AI executive order as soon as his first day on the job.
  • Trump will round out his day one agenda with actions that “institutionalize the conservative culture wars.” Ideas include a ban on government diversity, equity, and inclusion initiatives, pardons for individuals convicted of crimes related to January 6th, and a federal hiring freeze coupled with a mandatory return to office policy.

Unified Control Does Not Necessarily Mean Unified Interests

Slow Pace on Capitol Hill. A flurry of executive orders (EOs) reflects, in part, a lack of speed from Congress.

  • An early focus on executive action doesn’t mean that Trump is giving up on an ambitious legislative agenda but allows him to notch some accomplishments more quickly.
  • While Trump can enact EOs with the stroke of a pen, lawmakers can’t move that quickly. Even under unified GOP control, the legislative process isn’t speedy. The budget reconciliation procedure is lengthy and complex, requiring compliance to a set of rules determined by the Senate parliamentarian.
  • With reconciliation the priority of congressional Republicans, there will be limited bandwidth to pursue other legislative goals, pushing back some issues that will require bipartisan agreement.

Intra- and Inter-Chamber Tensions. Unified GOP control is not without divisions.

  • Each chamber of Congress has its own sources of tension. Though House Speaker Mike Johnson (R-LA) clinched the gavel without an extended fight this month, that doesn’t mean that the House GOP is free of discord. The conference remains split among the ideological factions that have been called the “Five Families.”
  • Johnson will have to keep a razor-thin majority together and can only afford to lose a handful of votes on any issue. Republicans lost two seats in the elections. Johnson is poised to be down three additional seats due to the resignation of former Rep. Matt Gaetz (R-FL) and the departure of Reps. Mike Waltz (R-FL) and Elise Stefanik (R-NY) for jobs in the Trump administration. This dynamic gives any one House Republican significant leverage.
  • While Senate Republicans enjoy a more robust majority, they’re also under new leadership for the first time in almost two decades with Senate Majority Leader John Thune (R-SD). Though he previously served in the number-two leadership role, any major transition can be a source of potential instability.
  • The two chambers often don’t see eye-to-eye. House Republicans are less willing to distance themselves from Trump and Senate Republicans have more procedural challenges.

Some Major Disagreements. As a result, Republicans are not entirely on the same page regarding issues of process or substance.

  • The biggest question facing congressional Republicans is whether to pursue one large reconciliation bill with all of their top priorities, such as tax reform and border security, or split it into two. The House favors the former, which would be easier to get over the finish line with a narrow majority, while the Senate prefers the latter. Trump, for his part, has wavered on the issue. “While I favor one bill, I also want to get everything passed. And there are some people that don’t necessarily agree with it, so I’m open to that also,” he said last week.
  • This debate must be settled before lawmakers can get to work because both chambers must adopt the same budget resolution with specific spending amounts in order to unlock the reconciliation process. House Budget Committee Chair Jodey Arrington (R-TX) said that he plans to get this done by the end of February.
  • The GOP is also divided on some of the major components of a reconciliation bill. Republicans representing high-tax states, notably New York, New Jersey, and California, seek to increase the limit for the state and local tax deduction, which is not broadly popular within the party. Meanwhile, Johnson has said that he intends to raise the debt limit via reconciliation, a plan that could run into trouble with fiscal conservatives who generally oppose all debt limit votes.

How China is Remaking the Executive Branch

Commerce Sheds Little Brother Label. While the Treasury Department has historically been considered more prestigious than the Commerce Department, the US’s deepening rivalry with China has significantly elevated the latter’s profile in recent years.

  • The Commerce Department’s growing importance can be attributed mainly to the tools presidential administrations rely on to compete with China. Measures like export controls and tariffs are being dramatically expanded, spotlighting the Commerce Department.
  • This trend is anticipated to continue in the incoming Trump administration. President-elect Donald Trump is expected to use these tools aggressively, especially tariffs. His administration will also likely expand US export controls, further elevating the Commerce Department’s profile.
  • The Commerce Department’s expanding portfolio is not only due to its role in overseeing international trade but also to the newfound responsibility it received in managing the CHIPS Program aimed at promoting domestic manufacturing of semiconductors. While Trump has criticized the program, he will likely make some tweaks rather than scrap it entirely. Additionally, the Commerce Department still likely remains at the top of Trump’s list to lead similar industrial policy initiatives for other sectors.

Wither Treasury? Not So Fast. The Commerce Department’s importance may be rising, but that has not been entirely at the expense of the Treasury Department, which continues to have a significant role in shaping the US-China relationship even if the mechanisms through which it is doing so have changed.

  • While the Treasury Department has played a leading role in interagency dialogues with China in recent decades, the growing tension between the two superpowers has shifted away from this type of diplomatic engagement. Instead, other policies have risen in importance at the Treasury Department as the agency looks to compete rather than cooperate with Beijing.
  • One initiative that has climbed significantly is the department’s oversight and regulation of outbound investment, which was established by President Joe Biden and may be expanded by Trump. Additionally, the Treasury Department’s role in tax policy cannot be ignored from a macro perspective and its role in managing tax credits, given their close link to industrial policy, much of which stems from a desire to outcompete China.

Furthermore, the Treasury Secretary’s typical role as a messenger on the economy for the president, particularly to the business community and Wall Street, cannot be understated. This is especially true in the incoming Trump administration, where Trump views the trajectory of the financial markets as a reflection of his perceived success. So, he will likely use Scott Bessent, his Treasury secretary nominee, to assuage businesses’ concerns about his policies.

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