Trump faces complex path to pass agenda despite GOP majority

Banking & Financial Services
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Darryl Traweek Divisional Director Private Client Group–West RBC Wealth Management–U.S. | Royal Bank of Canada

The U.S. legislative process involves four key players: the president, House of Representatives, Senate, and courts. Although Republicans control both chambers of Congress, the Trump administration may not have an easy path to legislative success. Reconciliation and executive orders will be significant, but traditional legislative methods remain crucial.

The House of Representatives consists of 435 members serving two-year terms, heavily influenced by its speaker and the Rules Committee. Districts often favor one party, leading to more extreme views among members. In contrast, the Senate's 100 members serve six-year terms with elections every two years for one-third of the body. The filibuster requires a 60-vote supermajority for most bills.

"The Republican majority in the House is thin," yet "likely reliable on many issues." Elon Musk’s Political Action Committee and President Trump's popularity exert pressure on Republican House members. However, budget matters present challenges due to conflicting priorities between tax cuts, spending cuts, and deficit levels.

In the Senate, eliminating the filibuster remains a contentious issue. With Democrats holding leverage through it, removing this requirement poses risks for Republicans given their slim majority and potential midterm election impacts.

Three paths forward exist for implementing Trump's economic agenda: traditional legislation requiring compromises with Democrats; expedited reconciliation bypassing the filibuster for financial bills; or executive orders offering quick action but limited scope without Congressional backing.

Executive orders have been extensively used by past presidents like Ronald Reagan (381 times) and Bill Clinton (364 times). Trump's first term saw 220 orders issued while Joe Biden’s total was just over 160. These allow swift policy implementation within statutory or constitutional limits.

Overall negotiations are expected on key agenda items despite Republican majorities in Congress as reconciliation processes alongside executive orders facilitate rapid implementation where possible but broader goals necessitate conventional lawmaking efforts too.