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Top 10 takeaways in 2016 election results

RFP
It’s all over — no more debates, robocalls or campaign ads. It’s on to what’s next. We offer this top 10 list of factors that will influence the future of our country.

No. 1 A historically unpopular candidate must bring national unity
Donald Trump won a solid electoral victory, but the popular vote was split by a razor-thin margin. This validates one assertion that wasn’t torn to shreds on election night — the winning candidate will enter the White House as the most unpopular president in history. Trump struck a conciliatory chord in his victory speech, emphasizing unity and vying to be a president for all Americans. But putting those words into action and subsequently earning the trust of the country will be nothing short of a complicated juggling act. Many of Trump’s positions put him at odds with not just Democrats but also leaders within his own party, and he will need to rectify those differences to carry out the wholesale changes he promised.

No. 2 Leaders on both sides must work together to advance pro-growth policies
House and Senate leadership and members of Congress must come together and strike deals on critical initiatives that have been left to languish for years. Infrastructure, tax reform, immigration and cybersecurity are among the issues that affect nearly all individuals and businesses, but have not yet been addressed by lawmakers. Republicans, now in control of Congress and the White House, have no excuse for failing to deliver on the promises they’ve made during the Obama years. And you can be certain that Democrats, licking their wounds after a humiliating defeat, will hold them accountable as they seek redemption in 2018 and 2020.

No. 3 The magic number in the Senate is 60
Republicans have secured a narrow majority but do not have the 60 votes effectively required to pass legislation. Senate leaders will have to work with their counterparts across the aisle to broker agreements that move the ball on legislation. Fortunately, we can expect Majority Leader Mitch McConnell, R-Ky., to have a better working relationship with Minority Leader Chuck Schumer, D-N.Y., than he had with Schumer’s predecessor, now-retired Senator Harry Reid, D-Nev.

No. 4 Republicans have to get their House in order

Democrats picked up five seats, narrowing Speaker Paul Ryan’s Republican majority ever so slightly. The underlying tension between establishment Republicans and the party’s far-right contingent remains. This split will inevitably resurface and may prove troublesome in passing significant legislation such as comprehensive reforms in tax or immigration.

No. 5 Faith in our democracy must be restored
Donald Trump said it throughout the campaign — the system is rigged. On election night, nearly half the American voters made it clear that they agree. This year’s election was a repudiation of the Washington establishment and a call to “take back the country.” However, this is nothing new. Congress’s approval ratings have been at historic lows for years. Many Americans, private individuals and business leaders alike, believe their voices aren’t heard and their interests aren’t protected by their elected officials. That is perhaps why Trump’s promises to get rid of “unfair trade deals” and untangle the system of bureaucracy in Washington resonated so deeply.
 
No. 6 It’s still all about the economy
Much of the frustration in the country is rooted in the economy. Many feel unable to get ahead, and they’re anxious about what the future holds. This is an issue not confined to a particular demographic or geographic region. It’s felt in nearly every class, from blue-collar communities where energy and manufacturing jobs have taken hits to college-educated millennials unable to find work and saddled with student loan debt. That partly explains how the nation could choose Donald Trump after electing his near-polar opposite in President Obama to two consecutive terms. And we can conclude that such swings will continue until Americans feel the country is on sound economic footing. But for now, they’re willing to give Trump’s approach a chance, which includes an increase in national infrastructure spending, massive tax cuts for individuals and corporations, and restructured trade agreements.

No. 7 Trump is reaching across the Republican Party to fill his cabinet
Already, many of the cast of characters who surrounded Trump on the campaign have been tapped to be a part of his administration. But there are some fresh faces and some surprising familiar ones, as well. Trump selected former Wall Street executive Steve Mnuchin and billionaire Wilbur Ross, neither of whom has previously served in government, to head Treasury and Commerce, respectively. South Carolina Governor Nikki Haley, who was less than enthusiastic about Trump during the campaign, has been picked to serve as United Nations ambassador. And Mitt Romney, one of Trump’s staunchest critics, is reportedly being considered for secretary of state. It appears after a contentious campaign, Trump is attempting to unite Republicans before he steps into the Oval Office.

No. 8 The Supreme Court could be altered for generations
Trump’s transition team has released an ambitious plan for his first 100 days. It includes many of his familiar campaign promises, such as withdrawing from the Trans-Pacific Partnership, halting immigration from terror-prone regions, cutting taxes, investing in infrastructure, and repealing and replacing Obamacare. Of course, many of these objectives require cooperation from Congress. Even with Republican majorities in both chambers, there’s no guarantee they will ever pass, let alone in the first 100 days. Still, Trump appears intent on hitting the ground running.

No. 9 Activity on the president’s policy agenda is likely to get a fast start

Trump has promised a combination of policy proposals that, though somewhat paradoxical, encompass what many Americans want. He has said he would reduce taxes by $4 trillion while avoiding cuts to Social Security, Medicare and Medicaid. He has said he would deport 600,000 illegal immigrants while imposing trade tariffs on Mexico and China. He has also said he would cut overall spending while increasing the defense budget and offering child care assistance. These proposals reflect the broader themes of his campaign and are probably what he’ll set out to do upon accepting the nomination, especially while he has a friendly Congress to work with.

No. 10 The countdown to 2018 and 2020 is underway
As previously suggested, it’s safe to say the Democratic Party will not simply ride off into the sunset. The 2018 and 2020 elections will be on the minds of both parties, and that will influence how they carry themselves over the next two to four years. For Democrats, some deep soul searching is warranted, but the progressive wing of the party has already been given more deference. Senators Bernie Sanders, D-Vt., has been added to the Senate Democratic leadership team, and Rep. Keith Ellison, D-Minn., is the current front-runner for chairmanship of the Democratic National Committee. For Republicans, the pressure isn’t as great. But they, too, have an identity crisis that must be rectified before future elections.

How will the new administration and 115th Congress affect the economic environment? See Predicting the realities of a Trump presidency: An Oxford Economics analysis; Gregory Daco, head of U.S. macroeconomics at Oxford Economics, provides an assessment of economic and political affects, with illustrations based on Oxford Economics’ models and analysis.

For a perspective on the potential for significant tax changes, see Will tax reform help your business?