President Trump Dumps Dodd-Frank with Executive Order
- Author: Zachary Reyes Apr 26, 2017,
Apr 26, 2017, 20:47
President Donald Trump will sign an executive order to review any major tax regulations set previous year by his predecessor, as well as two memos to potentially reconsider major elements of the 2010 Dodd-Frank financial reforms passed in the wake of the Great Recession.
Mnuchin declined to specify when the administration's plan for tax reform will be unveiled, but said it would be coming "soon" and Trump teased a "big announcement" Wednesday.
The date will be just prior to the end of Trump's first 100 days in office.
U.S. President Donald Trump ordered the Treasury Department on Friday to examine two powers given to regulators to police large financial companies following the 2008 financial crisis, Treasury Secretary Steven Mnuchin said. But reconciliation bills can not increase the deficit outside of the first ten years after they're passed.
"People can't do their returns", Trump said Friday.
"He pledged to dismantle Dodd-Frank, and his actions today are another significant step towards ending the Dodd-Frank mistake that has given Washington bureaucrats more power to politically control our economy", Mr. Hensarling said.
Last week, Mnuchin said that enacting tax reform legislation ahead of August was not "realistic", backing down on Trump's promise for tax reforms.
The move is separate from legislative action to reform the United States tax code, which Trump indicated would be unveiled Wednesday. That means Democrats would have to support it, and Republicans and Democrats have major differences when it comes to tax reform.
Trump's willingness to let deficits run higher also could hinder the passage of tax cuts that are permanent. They would need at least 60 votes to get such a tax measure through.
"The process has begun long ago, but it will formally begin on Wednesday", he said.
"These regulations enshrine "too big to fail" and encourage risky behaviour", Trump said of the regulations, adding that they are failing in their role as safeguards.
In the other two executive orders, Trump instructed Treasury Secretary Mnuchin to review the damaging Dodd-Frank regulations that failed to hold Wall Street firms accountable.
Supporters of the provision, though, have said repealing it without another system in place could put taxpayers on the hook the next time there's a financial crisis.
His report will explore if it would be better to liquidate troubled financial firms through a modified form of bankruptcy.
One order temporarily freezes a portion of Dodd-Frank known as the Orderly Liquidation Authority, which gives the federal government broad discretion in making loans to failing financial institutions. "I think everybody would agree that the tax system is way too complicated andburdensome", he said.
Still, lawmakers from both parties have said the corporate tax rate must be reduced to help US companies compete with firms headquartered in other countries and to prevent USA firms from moving overseas.