donald trump 45th president of the usa€¦ · web view“the first method for estimating the...

“The first method for estimating the intelligence of a ruler is to look at the men

he has around him.” – Machiavelli

Donald Trump 45th President of the USA

A look at the Trumps Cabinet nominees and what we can expect from them

Pumulo Sikaneta - 2017

“To me it’s very simple: If you’re going to be thinking anyway, you might as well think big.”

Donald J. Trump

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Table of Contents

Introduction.................................................................................................................................................5

Economic Roles...........................................................................................................................................7

Introduction.............................................................................................................................................7

The Nominees..........................................................................................................................................8

Steven Mnuchin – Secretary of the Treasury ......................................................................................9

Wilbur Ross – Secretary of Commerce..............................................................................................11

Gary Cohn – Director of the National Economic Council ..................................................................13

Mike Mulvaney – White House Office of Management and Budget Director....................................14

TBD – Chair of the Council of Economic Advisors..............................................................................15

Security Roles............................................................................................................................................16

Introduction...........................................................................................................................................16

The Nominees........................................................................................................................................17

James Mattis – Secretary of Defense ................................................................................................18

Vincent Viola – Secretary of the Army ..............................................................................................19

Randy Forbes – Secretary of the Navy...............................................................................................20

John Kelly – Secretary of Homeland Security.....................................................................................21

Michael Flynn – National Security Advisor.........................................................................................23

Mike Pompeo – CIA Director.............................................................................................................24

TBD – Director of National Intelligence.............................................................................................26

International/Diplomatic Roles..................................................................................................................28

Introduction...........................................................................................................................................28

The Nominees........................................................................................................................................29

Rex Tillerson – Secretary of State......................................................................................................30

Terry Branstad – Ambassador to China.............................................................................................32

Peter Navarro – Trade Czar................................................................................................................34

Nikki Haley – US Ambassador to the United Nations.........................................................................36

TBD – Trade Representative..............................................................................................................37

Legal/Consultative Roles...........................................................................................................................38

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Introduction...........................................................................................................................................38

The Nominees........................................................................................................................................38

Development & Infrastructure Roles.........................................................................................................40

Introduction...........................................................................................................................................40

The Nominees........................................................................................................................................41

Linda McMahon – Administrator of the Small Business Administration............................................42

Ryan Zinke – Secretary of the Interior...............................................................................................43

Ben Carson – Secretary of Housing and Urban Development............................................................44

Elaine Chao – Secretary of Transportation........................................................................................45

TBD – Secretary of Agriculture...........................................................................................................46

Education & Healthcare Roles...................................................................................................................47

Introduction...........................................................................................................................................47

The Nominees........................................................................................................................................48

Tom Price – Secretary of Health and Human Services.......................................................................49

Betsy Devos – Secretary of Education...............................................................................................51

TBD - Secretary of Veteran Affairs.....................................................................................................53

Energy, Labor & Environment Roles..........................................................................................................54

Introduction...........................................................................................................................................54

The Nominees........................................................................................................................................55

Rick Perry – Secretary of Energy........................................................................................................56

Scott Pruitt – Environmental Protection Agency Administrator.........................................................58

Andrew Pudzer – Secretary of Labor.................................................................................................60

Conclusion.................................................................................................................................................62

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Introduction

In 2017, Donald Trump will become the 45th President of The United States of America. Trump has promised a transformational presidency and people around the globe are anticipating big differences in the way the USA is lead. Donald’s history as a business man, his campaign style and his administration indicate that he intends to run his cabinet and government much like a Game of Thrones Episode. He will put charismatic, persuasive people, used to wielding power, in positions of influence. The leaders he has selected have divergent and often very incongruous sets of beliefs and internal battles are inevitable. He will pit factions against each other and see who comes out on top. This is a strategy that has been used in the past, most famously by Lincoln and his Cabinet of “Ornery Men”.

Trump’s success at the polls can be partially attributed to his promise of change. Exit polls showed that Americans considered that to be the biggest influence on their vote and those seeking change overwhelmingly supported Trump. To implement the promised changes, Trump will rely on his cabinet. His selections reflect Trumps leadership style. They all share at least some of the traits that have defined Trump including: aggression, deal negotiation, ambition, and brand awareness.

In this paper, I will examine some of the key Cabinet selections*, examining the individual’s history, the roles they will be assuming, and attempting to infer the likely impact they will have on the government agencies they will lead. I will look at the potential for technology to play a role in transforming and optimizing the various agencies. I will make inferences throughout and attempt to defend them through facts and previous patterns of behavior.

To provide a narrative flow to the information provided in this paper, the nominees have been split into 7 groupings:

1. Economic Roles2. Security Roles3. International/Diplomatic Roles4. Legal/Consultative Roles5. Development & Infrastructure Roles6. Education & Healthcare Roles7. Energy, Labor, and Environment Roles

By the end of the paper, the reader should have a good grasp of what Trumps priorities are and how he intends to pursue them. You may not agree with the inferences made, but the goal is to inform your own opinions and provide the facts necessary to anticipate the upcoming changes. As with most change, there will be opportunity. For those who anticipate the opportunities and position themselves to react, the opportunity to benefit will be greatest.

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* This paper is not intended to be an examination of political ideology. Certain cabinet positions are overtly political and less relevant to the goals of this paper and are not examined here. Some of the roles in the cabinet are likely to have a much smaller impact on the goals and priorities of the Administration and have also been omitted from this paper.

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Economic Roles

Introduction

Trump’s Economic team nominations came as a surprise for many people who viewed his campaign rhetoric as a sign of an impending battle with Wall Street and more specifically with Goldman Sachs. His selection of Stephen Mnuchin as Secretary of the Treasury, Wilbur Ross as Secretary of Commerce and Gary Cohn as Director of the National Economic Council indicate that he is going to have an outsized influence from Wall street advising his key economic initiatives.

The Game of Thrones dynamic is evident in the group of influencers selected for his economic team.

Ross and Larry Kudlow will battle it out to determine how insular the US economy will be. Ross will collaborate with Peter Navarro, the nominee for Trade Czar to create new protections for American goods and introduce tariffs and restrictions on imports. They both view China as the chief offender in unfair trade practices and are looking to level the playing field. Kudlow will team up with Rex Tillerson and Andrew Pudzer to argue against protectionist policy and in favor of open global markets.

Mnuchin, Ross and Cohn will battle Mike Mulvaney on fiscal responsibility and the need to balance the budget. Mnuchin, Ross and Cohn are primarily concerned with stimulus and the need to improve the nation’s and invest in the armed forces. Mulvaney is a cofounder of the Tea Party and is adamantly set on balancing the budget through cuts and caps on spending and programs.

The economic team will provide the fuel required to affect the major change Trump is proposing for the government. Mnuchin has the most powerful role as Secretary of the Treasury, but we can expect Cohn to play a significant role as the quarterback for domestic economic policy and the glue that ties together the various cross-agency initiatives.

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The Nominees

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Donald TrumpPresident

Steven Mnuchin Secretary

of the Treasury

Wilbur RossSecretary of Commerce

Todd RickettsDeputy Secretary of

Commerce

Gary CohnDirector of the

National Economic Council

Mike MulvaneyWhite House Office of Management and

Budget Director

TBDChair of the Council

of Economic Advisors

Steven Mnuchin – Secretary of the Treasury

Steven Mnuchin is an entrepreneur, a Wall Street investor and a Hollywood producer who will now be assuming a position made famous by Alexander Hamilton. The Department of the Treasury is a heavyweight department in the US government and there is an in-depth analysis of the expected impacts to the various offices, bureaus, and initiatives in the department in a follow up paper, but understanding its new leader’s priorities will help predict the direction of policy and focus for the department.

Mr. Mnuchin has talked about lowering taxes and lifting regulations, but so far there have been very few specifics. Friends of Mnuchin have described him as not ideological, with his chief motivation being simply his ambition. This is an image that Trump has sought to portray of turning over the running of the US to hungry, business minded and ambitious people who have enjoyed success in the private sector and are not tainted by the bureaucracy of politics.

Tax reform is the most highly publicized goal of Trumps administration. The IRS which will fall under Mnuchin’s stewardship currently collect more than 90% of federal revenue. The sweeping reforms proposed have sought to reduce taxes for almost all Americans and American businesses while streamlining the tax code and reducing special entitlements and tax loopholes. Mnuchin and Trump have stated that the corporate tax rate will be cut to 15% from the current 35%.

Mnuchin’s department will work closely with all the other agencies in the US government to provide financial support and enforce accountability. Early priorities that Munichin has focused on include Infrastructure investments and the need to fix Americas roads and bridges. Working with Congress, Mnuchin hopes to use a blend of public-private partnerships to fund the infrastructure modernization efforts.

Trump has indicated that the 2010 Dodd-Frank law, that imposes regulations on Banks in order to prevent another financial crisis, will undergo major change. The new

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EXPECTED IMPACT

Steven Mnuchin’s appointment reflects a willingness to act more conciliatory towards Wall Street. Together with the appointment of Wilbur Ross, there seems to be a reversal of direction from the campaign rhetoric which was very antagonistic towards Wall street.

There is a growing sentiment on Wall Street that regulations and the prosecution of key figures that accompanied the oversight of the past 8 years will potentially be eased in the Trump/Mnuchin administration.

The sweeping tax reforms being proposed and the introduction of new programs to support the Infrastructure investment will require major technology initiatives to support them.

The changes being proposed to Dodd-Frank will ease the regulatory burden on financial institutions and free up their technology spend for other initiatives.

administration feels that the law was too restrictive and hinders banks from making loans needed to stimulate the economy. Mnuchin views the loans being restricted as “the engine of growth” for small and medium sized businesses. Any reforms to the law will be heavily influenced by Mnuchin and his department.

Mnuchin’s nomination is likely to face some resistance from critics who see his controversial business past as problematic. He made a huge profit from his involvement in OneWest Bank where he was accused of lending discrimination and predatory foreclosure tactics. Under his leadership, OneWest foreclosed upon as many as 36,000 homeowners in California, using a government loss sharing program to profit over $1 billion.

The 2016 budget for the Department of the Treasury was approximately $14 billion for operating expenses and $3 billion for international programs.

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Wilbur Ross – Secretary of Commerce

The Secretary of Commerce is responsible for promoting the US’s business and ensuring its markets run well. A key role that the secretary plays is providing oversight of the country’s international trade rules. This has been a heavy focus of the Trump campaign as he has frequently assailed “trade imbalances with China” and expressed his opposition to Free Trade Agreements.

Ross’s views with respect to Free Trade are similar to Trump’s but a little more openminded. He has expressed guarded favor for some free trade and is an advocate for the Trans Pacific Partnership* which Trump has emphatically railed against. He also seeks to make existing free trade agreements more favorable to the US and upon being nominated Ross indicated that his first goal would be to renegotiate NAFTA**. He views China as a job killer for Americans and will have a significant impact in policy to remediate that.

Ross has hands on experience in the world of finance and was a pivotal voice in authoring Trump’s economic plan. His success in business has come with some controversy as his businesses have been forced to pay fines to the government on several occasions for irregularities. He has also defended the 1%ers against popular public backlash in the past. It can be expected that he will be sympathetic to Wall Street and work with Mnuchin to ease up financial regulations.

Ross will play a big role in guiding the US through new challenges introduced by technology advances. The American policy with respect to blockchain and bitcoin needs to be strengthened. In July of 2016, Congress proposed “a national policy for technology” that would include digital currencies and blockchain. The resolution states:

“The US should develop a national policy to encourage the development of tools for consumers to learn and protect their assets in a way that maximizes the promise customized, connected devices hold to empower consumers, foster future economic growth, create new commerce and new markets.”

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EXPECTED IMPACT

A trade war with China will have a huge impact. Inflation will increase rapidly as tariffs are introduced and increased. This will have the same effect as a tax on the lowest income American’s as the stores that have the most reliance on Chinese goods disproportionately serve the lower income demographics of the USA (e.g. Walmart).

Any manufacturing recovery in the US will require training and will have higher labor costs resulting in higher costs, and potential disruptions to supply for the end consumers.

Renegotiation of NAFTA and restricting involvement in future Free Trade will further protectionist interests and likely incent companies to stay rooted in the USA.

Formulation of a policy to address blockchain and other technical advances will be part of Ross’s challenges as Secretary of Commerce.

Ross and the Commerce Department will likely be responsible for creating a vision for how the US views alternative non-fiat currencies.

In lauding his nominee, Trump’s praise is an indication of what he seeks to achieve with Ross in his administration: “Wilbur knows that cutting taxes for working families, reducing burdensome government regulations and unleashing America's energy resources will strengthen our economy at a time when our country needs to see significant growth."

Ross will adopt existing department programs that align with Trumps vision of promoting American jobs and competing internationally. One program likely to get even more support and sponsorship is the National Institute of Standards and Technology (NIST), whose goal is to foster innovation in the US economy. NIST works with the National Network of Manufacturing Innovation in supporting the “academia and industry for applied research on new technologies and design methodologies.”

The 2017 Commerce budget has approximately $10 billion in discretionary spending.

* Trans Pacific Partnership – Australia, Canada, Japan, Malaysia, Mexico, Peru, USA, Vietnam, Chile, Brunei, Singapore and New Zealand

** NAFTA – North American Free Trade Agreement between Canada, the USA and Mexico

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Gary Cohn – Director of the National Economic Council

Gary Cohn will be joining Trump’s administration as the head of the National Economic Council. The council helps the President set economic policy serving as the President’s quarterback on the economy, working with various agencies and programs to coordinate a multi-faceted approach to achieving the administrations goals. Trump has tasked Cohn with pursuing some of his campaign trails most important goals including:

• recommending candidates to head the Securities and Exchange Commission (SEC)

• developing a strategy to repeal the Affordable Care Act

• crafting plans for new infrastructure spending and tax reform

Cohn is another Trump selection with very close ties to Wall Street. He is the current president and COO of Goldman Sachs. Big banks are cheering the selection as further evidence that Trump’s campaign bashing of big banks was just rhetoric and that his governing strategy will play a much more bullish role for the financial sector.

Cohn is expected to be an enthusiastic supporter of infrastructure spending and other stimulus through government spending. This will likely put him at odds with the tea party conservatives in the legislative branch of the republican party.

Cohn has very close ties to Trump’s son-in law Jared Kushner. Cohn will act as Jared’s proxy in the Trump administration if Jared cannot play a direct role for legal reasons. Jared will likely be looking to further his own interests in real estate. Having the ear of Trump informally as his son-in-law and formally through Cohn, Kushner will presumably look to improve his prospects through infrastructure spending and tax changes that benefit real estate and the Kushner Companies*.

* This is speculation and not backed by any of the proposed initiates put forward so far

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EXPECTED IMPACT

The infrastructure spending that Trump has championed is an approach that is not traditionally embraced by conservatives. Having a proven leader with Cohn’s assertiveness will help champion this cause and push through administration goals. Cohn will work closely with the infrastructure agencies to structure the programs responsible for the new government spending and apportion the funds appropriately.

Cohn will also work closely with the Department of the Treasury and the Commerce Department on structuring economic strategy and implementing tax reform. Trump will work closely with Tom Price in the Health department to repeal, or restructure the Affordable Care Act.

Look for Cohn to have a big influence on all the non-security related spending initiatives within Trump’s administration.

Mike Mulvaney – White House Office of Management and Budget Director

Mike Mulvaney, a member of Congress from South Carolina, is a former small business owner who is best known as being a co-founder of the Freedom Caucus. He co-authored the “Cut, Cap and Balance Act of 2011” which targeted perceived unneeded federal spending, and proposed a balanced budget amendment to the Constitution. The bill was passed by the House but the Senate never voted on it and Obama threatened to veto it. With Mulvaney now positioned to take control of Director of the Office of Management and Budget (OMB), the bill will likely serve as a blueprint for his intended agenda.

In his new role, Mulvaney will need to work with Congress to achieve his budgetary and fiscal goals. Both Obama and Bush saw opportunities to reduce the number of duplicative programs and to eliminate programs that are no longer necessary. However, in both administrations, Congress imposed roadblocks to significant change and very little was done. Mulvaney will assume the position with strong connections in Congress from the Tea Party and the larger Republican party from his time serving in the House. His experience working on the “Cut, Cap and Balance Act” and the knowledge he gained serving on the “Committee of Financial Services” and the “Committee on Small Business” while in Congress provide him with a strong understanding of the nuances of his new role. He will also rely on the relationships he developed with key congressional allies.

The Budget for 2017 is already structured and the Budget for 2018 is due to Congress in February 2017 so Mulvaney will first get to exert heavy influence in the 2019 Budget. It will be a balancing act for Mulvaney to achieve Trumps goal of boosting Infrastructure and Defense spending while also meeting the goals of his “Cut, Cap and Balance Act”. His tenure in Congress and his influence on the Tea Party indicate that he does not have any tolerance for increasing discretionary spending and will likely be a force for moderation with respect to stimulus.

In the past, he has been willing to accept a default as opposed to increasing the debt ceiling. This will be an issue that will present itself again under Trump’s administration.

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EXPECTED IMPACT

In spite of Mike’s strong connections in Congress this position is at the mercy of Congress and his influence will not be a huge impact. He is tasked with conflicting goals of shrinking the government while using federal stimulus to boost infrastructure and Defense spending. This will likely lead him to seek to increase the privatization of government initiatives and to lean on the free market to implement and manage the proposed programs. It will still require federal dollars to fund, requiring a budget that will likely contradict Mulvaney’s strict fiscal conservative values.

TBD – Chair of the Council of Economic Advisors

As of December 29th 2016, Donald Trump has not selected his Chair of the Council of Economic Advisors. The leading candidate for the position is Larry Kudlow. Kudlow is a big proponent of the free flow of capital. This would put him at odds with the philosophies of Wilbur Ross and Peter Navarro (and Carl Icahn) who are positioning the USA for a trade war with China and reduced commitment to free trade agreements. It is unlikely that this role will have an outsized influence in Trump’s administration. Trump has shown a tendency to get directly involved in the details of his signature objectives and will likely be interacting with the members of his economic and trade teams personally and relying on the council much less than his predecessors. If their inputs provide material to strengthen his arguments he will use them, otherwise they will likely be overlooked**.

Early soundbites following the election have pointed to a looming trade and tariff standoff between China and the USA and Kudlow’s views have already taken a backseat to the antagonistic and protectionist views espoused by Ross and Navarro.

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EXPECTED IMPACT

The council will likely be a rubber stamp on Trumps personal economic policy views**. Inputs will be heard but likely overridden by the protectionist faction within Trumps administration.

* If Kudlow is not selected and someone else assumes the role, this viewpoint will need to be revised

** Strong personal conjecture and not based on facts

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Security Roles

Introduction

Donald Trump wants a much bigger military. Military power is an absolute requirement for his political strategy internationally. Obama was a politician who focused very much on diplomacy while Trump’s strategy is much more in line with Machiavelli who wrote:

“It is better to be feared than loved, if you cannot be both.”

Unlike other cabinet groupings outlined in this paper, the Security Team is a homogenous group of likeminded individuals. They all share their boss’s brashness and commitment to American power. With the nicknames “Mad Dog” and “The Warrior Monk”, James Mattis will lead the security team.

The key focal areas will be increasing the size of the armed forces, combatting Radical Islam, tensions in South China Sea, strengthening US Borders, improving technical capabilities and modernizing weapons and equipment.

On the campaign trail Trump was famously quoted as saying he “knows more than the generals”. Will his governing style reflect that conviction? It is possible that he will be very hands on with this group and he has already shown his willingness to participate in procurement negotiations with Lockheed Martin and Boeing.

Trumps wavering commitment to NATO is another issue that will be prominent in 2017. It is not addressed in this paper but any changes to the alliance would have a significant impact on the mandates and operational capabilities of this group of Cabinet members.

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The Nominees

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James Mattis

Secretary of Defence

Vincent ViolaSecretary of the

Army

Randy ForbesSecretary of the

Navy

John KellySecretary of Homeland

Security

Michael Flynn National

Security Advisor

KT McFarlandDeputy National Security Advisor

Mike PompeoCIA Director

TBDDirector of

National Intelligence

James Mattis – Secretary of Defense

James “Mad Dog” Mattis is the nominee for Secretary of Defense. In that role, he will be responsible for both operational and administrative purposes, subject only to the orders of the President, over all Department of Defense forces: The Army, Marine Corps, Navy, and Air Force.

Trump is looking to bolster American military might and has pledged to increase the Navy’s deployable ship fleet from 272 ships to 350, increase the active duty army by 60,000 soldiers and the marine corps by 20,000 service members. Working with the Secretary of the Navy, Secretary of the Army, and the Commandant of the Marine Corps, Mattis will be responsible for overseeing this expansion.

Mattis has said that responding to “political Islam” is the major security issue facing the US. He has questioned whether political Islam is in the best interests of the US and called the Iranian regime “the single most enduring threat to stability and peace in the Middle east”

The economic impact of the new administration will be a significant increase in defense spending. Trump has also shown a willingness to get embroiled in the procurement process and negotiation of contracts by the defense ministry. He has already been involved in contract negotiations with Lockheed Martin and Boeing regarding the controversial F-35 fighter jet and the F-18 Super Hornet.

Trump may dominate the headlines, but Mattis will drive the negotiations behind the scenes. Now that the industry has been put on notice that there is a significantly reduced appetite for cost overruns, unpredictability, and tolerance for the status quo, Mattis will be charged with putting in place a more accountable procurement process. Lockheed and Boeing stocks have both taken a hit with the new criticism of existing contracts.

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EXPECTED IMPACT

What will the strategy regarding Iran and the current nuclear deal be? How will Trump and Mattis view the battle against ISIS and the need for more US involvement in the fight against extremist Islam? These are some of the large unknowns that will have a significant impact on the role of the US Department of Defense under the new administration.

It is unlikely that the US can gather international consensus to re-impose biting sanctions on Iran. Implementing unilateral sanctions will likely serve to isolate US interests from increasingly open international markets and increased globalization.

If the US chooses to take the battle against ISIS and Assad to the frontlines there will be a considerable human and capital cost.

Vincent Viola – Secretary of the Army

Vincent Viola is the nominee for Secretary of the Army.

Viola is a graduate of West Point where he helped found the “Combating Terrorism Center” following the September 11th

attacks. Their Web Site explains: “The Combating Terrorism Center at West Point bridges the operational and academic realms by providing present and future leaders with the intellectual tools needed to defeat and deter terrorist threats to our nation” *. Through the center, Mr. Viola has been involved in counterterrorism, cybersecurity, and leadership development.

Trump has stated a goal of increasing the active-duty army by 60,000 soldiers. Mr. Viola will be involved in setting the strategy for that expansion. The changing threats to the USA and the need to adapt to new types of warfare will require a metamorphosis and restructuring of our defense forces and Viola’s background positions him to be an influential voice in shaping that strategy. Cybersecurity is an increasingly prominent threat and a cohesive strategy needs to be developed and implemented. There have been calls to set up a civilian DARPA** focused exclusively on “over-the-horizon cyber research”. Americans need to be able to anticipate future threats and protect themselves appropriately. DARPA was created as a response to the launch of Sputnik in 1957, with a commitment to “be the initiator and not the victim of strategic technical surprises” ***. The need for a similar approach in today’s cyber-world is obvious.

Viola would also be involved in setting a strategy to combat terrorist threats, such as ISIS, with a long-term strategy. A proactive threat elimination strategy and campaign will save many more lives than a blunt force combative military response.

* https://www.ctc.usma.edu/about/mission

** Defense Advanced Research Projects Agency

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EXPECTED IMPACT

The modernization of the armed forces is a requirement for the US to maintain its role as a super-power. The technological advances required and the use of new approaches and strategies that seek to eliminate future conflicts is critical. As the US expands its fighting forces, it also needs to realign its strategies to prepare itself for the challenges of the future.

• investment in research to combat terrorism and cyber-terrorism,

• programs to counter terrorist ideology,

• analysis of threats in South Asia

• identification of nascent or unrealized emerging threats

All of this needs to be accomplished while continuing to serve the current roles of the US Army. Technology will play a huge role in the future of the Army.

*** http://www.darpa.mil/about-us/about-darpa

Randy Forbes – Secretary of the Navy

Randy Forbes is the nominee for Secretary of the Navy. He is a proponent of a 350-ship Navy and $20 billion annual ship building budget. He has a hawkish perspective on the situation in the South China Sea and has been a vocal opponent of Chinese actions there.

The current Navy has a 272-ship deployable fleet with existing (pre-Trump) plans to increase that to 308. Under the more aggressive Trump expansion opportunities will be presented to industrial base responsible for building and maintaining the ships.

The enlarged fleet will attempt to reduce stress on existing service men and women. Current deployments are 8-11 months and the Navy has set a goal to reduce that to 7 months by the end of the year.

Strategic goals for the Navy under Forbes will be to increase US presence in South China Sea to counter Chinese influence. Expand the US footprint in the European theater (particularly the Mediterranean Sea – Italy or Greece) to counter Russia’s Black Sea presence. Trump has expressed a desire to improve relations with Russia but he also wants to enhance our deterrent capabilities through naval superiority.

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EXPECTED IMPACT

The US Navy is far ahead of any other nations on a global scale but, Russia and China are starting to invest in modernizing and expanding their fleets. Regional imbalances are beginning to be equalized and with that, the USA’s influence is beginning to diminish somewhat.

Trump is seeking to reassert that dominance and Forbes will be overseeing the strategy to achieve that goal. US military might is still a strong bargaining factor as a protector of rights, guarantor of economic stability and opportunity, and regional arbitrator where necessary.

John Kelly – Secretary of Homeland Security

John Kelly will be assuming the challenging role of the Secretary of Homeland Security.

Kelly will be tasked with the central campaign issue of stopping illegal immigration. He will also be responsible for protecting the US from external threats entering the country. He will need to streamline the TSA and leverage new technologies to improve intelligence capabilities identifying threats to the country before they can enter the USA. Kelly will also be responsible for improving coordination between the US intelligence and law enforcement agencies. He will work with TSA*, ICE** and Border Patrol officers.

Tackling the challenges of identifying and preventing homegrown terrorist’s attacks will require new innovative approaches with heavy reliance on technology.

Kelly served as the former head of US Southern Command and was responsible for managing the security threats posed by criminal drug networks based in South and Central America. He was also previously in charge of operations at Guantanamo Bay.

A much-publicized goal of the Trump administration is “The Wall” between Mexico and the US. Kelly will likely play a significant role in the planning and implementation of “The Wall”. Kelly has stated that the same routes used by drug dealers could potentially be used by terrorist actors and agrees with the need to fortress the southern border. He has also expressed support for the increasing assistance to Central America to address the root causes of insecurity and instability in the region. Kelly believes that the security of the Western Hemisphere should not be taken for granted and it is only a matter of time before a tragedy strikes if we continue to remain in our current state of complacency.

Kelly will be a key influence on whether the US implements the controversial Muslim Registry.

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EXPECTED IMPACT

Building a Wall between the US and Mexico will be a huge undertaking with a high cost. Who will pay for this and where the labor will come from are big question marks.

Improving intelligence in the US and coordination between intelligence and law enforcement agencies will be a big part of Mr. Kelly’s job.

Technology will need to be further leveraged to assist in the identification and obstruction of terrorist activities, and the streamlining of our border processes for good actors.

* Transportation Security Administration

** Immigration and Customs Enforcement

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Michael Flynn – National Security Advisor

Trump’s candidate for National Security Advisor is Michael Flynn. This is one of the more controversial appointments as Flynn has been accused of retweeting anti-Semitic treats and of being anti Islam. In February Flynn tweeted “Fear of Muslims is RATIONAL: please forward this to others: the truth fears no questions…”. Flynn has also been criticized for his financial ties to Russia.

In his new role, Flynn will be advising Trump on his security strategy including his goal of increasing the size and spending of the US military. That will come with an anticipated price tag of $500 billion over the next 10 years. Flynn will have considerable influence in how that money is spent and where the security focus will be placed in the next term.

As the head of the National Security Council, Flynn will effectively manage international economic policy. Strategic interests such as shipping corridors in South East Asia will need to have strategies devised and planned by Flynn’s council in coordination with international partners. Flynn will also be advised on US sanctions. Any modifications to the Iran deal will involve Flynn.

Flynn’s ties to Russia are of concern given his role in devising strategy to combat escalating tension with an increasingly aggressive and militarily assertive Putin.

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EXPECTED IMPACT

Plans to expand the military and significantly increase its budget will present opportunities for new and innovative thinking. Flynn will help devise new strategies to combat threats in the Middle East, South Asia, Africa, Central America and Russia.

Economically Flynn will function as the chief advisor on international economic policy.

Mike Pompeo – CIA Director

The mostly explicitly apolitical job of any political appointee is that of CIA Director. Since his election, Trump has publicly disputed findings by the agency that indict Russia in tampering with the US election. It is into this environment that Mike Popeo will be thrusting himself as Trump’s nominee. He will be tasked with repairing the feud that has been created between the agency and Donald Trump. Pompeo will be responsible for relaying intelligence information to the President in a politically unbiased and accurate way. This will be complicated by the fact that Trump has stated that he will not follow the traditional approach of receiving daily intelligence briefings.

These challenges will complicate Pompeo’s role more than has been the case for previous appointees to the role. His demeanor also indicates that that may be a tall ask. Pompeo has a history of speaking his opinion loudly and with a perceived political tinge to his views. His criticism of Hillary Clinton was sharp and constant, his views that Snowden should be executed have been widely publicized. His use of Twitter to express his opinions is contrary to the typically clandestine approach that his role will now demand.

His previous role as Congressman from Kansas encouraged his brashness and willingness to share his views. Going “Dark” in his new role will require a new skillset for Mike. He has a history as a staunch conservative and was a member of the House Intelligence Committee, the Select Committee on Benghazi and on the Energy and Commerce Panel.

Pompeo has publicly criticized Obama for his condemnation of water-boarding. Considering Trump’s campaign rhetoric embracing enhanced interrogation tactics, it is likely that the CIA will once again resort to controversial intelligence gathering practices. Pompeo has also criticized Muslim Americans for not doing enough to counter terrorism, implying that they are therefore complicit in resulting attacks. His selection will further worry human rights groups that see a Trump administration as promoting Islamophobia.

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EXPECTED IMPACT

If Trump decides to implement a Muslim registry, Mike will be a key advisor and facilitator in its implementation. This could potentially open the door to other enhanced surveillance activities and targeted profiling.

Use of increasingly aggressive intelligence gathering methods such as water-boarding are likely to inflame human rights activists and bring renewed interest in the USA’s adherence to the Geneva Conventions.

Pompeo will be responsible for evergreening intelligence analytics and adapting to changing threats and mechanisms to detect and adapt.

As CIA Director, Pompeo will have a big voice in determining the necessity of a Muslim Registry. Based on his history it is very likely he will be in favor of one. Critics worry that Mike’s views may be used as propaganda by radical terrorists.

Pompeo was opposed to the Iran deal and will likely encourage stepped up activity by the agency to seek any violations to the deal from the Iranian side

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TBD – Director of National Intelligence

Trump is giving serious consideration to Carly Fiorina for the role of the Director of National Intelligence. Fiorina chaired the CIA’s civilian advisory board during the Bush administration.

The role of Director of National Intelligence was created in response to the September 11th attacks. Its goal is to “lead Intelligence integration” and “Forge an Intelligence Community that delivers the most insightful intelligence possible” *. In this role, Carly would be responsible for providing intelligence briefings to the President, the heads of departments and agencies of the executive branch, the Chairman of the Joint Chiefs of Staff, senior military commanders, and Congress.

Her responsibilities would include:

• setting the budget for the National Intelligence Program

• Interacting with foreign intelligence gathering agencies

• Conducting analysis of intelligence derived from multiple sources

• Coordination and planning joint policies and programs among the intelligence community

The adoption of evolving technology and the use of analytics, artificial intelligence and data gathering technologies are quintessential to the successful execution of the tasks her office is charged with managing. New threats such as cyber security threats will need to be addressed as they morph into the unknown threats of tomorrow. Monitoring of communications must be balanced with the privacy rights of citizens and non-citizens proportionately.

Trump has a contentious relationship with private technology enterprises who typically lean left and support policies such as clean energy, globalization, free trade as well as support for net-neutrality rules (which they fear Trump may try to unravel). Fiorina will be dependent on some of these organizations for intelligence data and her relationships from her time in the

29

EXPECTED IMPACT

This role as much as any will lean on technology to help detect, grade and report threats to national security. Analytics, Artificial Intelligence, data gathering technology and future advances will all be integral tools for the execution of the Office’s mandates.

Managing the sheer volume of data and grading/scoring and triaging information for further investigation will increasingly rely on machines as the first line of detection.

industry may be valuable to help ease the perceived tension between the administration and the industry.

* https://www.dni.gov/index.php/about/mission

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International/Diplomatic Roles

Introduction

Trump’s election was viewed with reservation by many in the international community. With the notable exceptions of Russia, Philippines and Israel, foreign leaders had hinted that they preferred the stability that they anticipated with a Clinton presidency. Trump’s comments regarding NATO and the United Nations have led many to believe that he is looking to downplay international organizations and is much more willing to take a go-it-alone approach to foreign affairs.

Russia is expecting Trump to be a much more willing partner than Obama. The selection of Rex Tillerson to lead the State Department was a welcome development as Tillerson has very good ties with Russia. Relations with China appear to be heading in the opposite direction. Trumps actions as the incumbent have caused concern in China. Terry Branstad’s nomination is an attempt to allay some of those fears. His interactions with China as the Governor of Iowa were very positive. Peter Navarro will be an agitator in the group working to increase US protectionism and downplay international interactions. Nikki Haley will take over the role of US Ambassador to the United Nations at a time when Trump is threatening to reduce funding and de-emphasize its role on the international stage.

The Game of Thrones dynamic in this group will play out between Branstad and Navarro. Tillerson will side with Branstad in seeking to preventing a trade war with China. Navarro will pair up with Ross from the Commerce department to seek a change the dynamic of the US relationship with China and if necessary start a trade war.

The actions of this group of leaders will have a large impact on the domestic market as trade agreements, trade wars and increased tariffs will impact the price of consumer goods. The impact will be felt most at lower cost stores such as Walmart that rely on cheap imports to keep costs down.

Trump has made inflammatory comments regarding the role of the US as an international peace keeper and the need for allies to join the nuclear group of nations. Critics argue that potential diplomatic miss-steps could lead to nuclear war. Trump’s diplomatic team will need to manage relationships proactively and ensure that situations do not escalate to the stage where nuclear confrontation becomes a viable option.

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The Nominees

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Rex TillersonSecretary of State

Terry BranstadAmbassador to

China

Peter NavarroTrade Czar

Nikki HaleyUS Ambassador

to the United Nations

TBDTrade

Representative

Rex Tillerson – Secretary of State

Rex Tillerson is Donald Trump’s nominee for Secretary of State. Tillerson is currently the CEO of Exxon Mobile. In his role at Exxon, Tillerson has traveled the globe and established relationships in many countries. While he has no formal political experience, his job as the leader of a multi-national conglomerate is what enticed Trump to select him as the nominee. Critics to the nomination point to Tillerson’s close ties with Russia and Vladimir Putin as troublesome. Putin awarded Tillerson the “Russian Order of Friendship” in 2011 and the head of Rosneft, Igor Sechin, is a close associate. The US sanctioned Sechin in response to Russia’s actions in Ukraine.

Tillerson would take over the Foreign Service and US State Department and would serve as the chief foreign advisor to the President. He would be responsible for conducting all negotiations relating to US foreign affairs, negotiating, and terminating foreign agreements and treaties. His political views are largely unknown but as the head of Exxon Mobile he predictably advocated for free trade. It is somewhat surprising to note that his views on climate change are more to the left than Trump’s. He has called the threat of climate change “real” and “serious”.

His views on free trade will put him in conflict with other top administration officials, most notably Peter Navarro, Trumps Trade Czar. Tillerson has a dominant personality and it will be an interesting dynamic to watch in the new year as power players carve out their niches. Trump has expressed a preference for trade restrictions and Tillerson will be fighting an uphill battle to keep trade agreements in place and ratify new agreements such as the Trans Pacific Partnership. It can be assumed that he will be opposed to any future trade war with China.

Based on his statements regarding climate change, he is likely to be an advocate of the US living up to its commitments of the Paris Agreement*. This puts him at odds with Trumps opposition to the Agreement.

33

EXPECTED IMPACT

Trump is looking to have improved relations with Russia and Tillerson will be an asset to have in his administration to interact with the Russians.

His views on free trade will serve as a moderating influence and a counterweight to the protectionist elements within the Administration.

Tillerson’s views regarding the need to combat human-caused climate change will be influential in international negotiations and US adherence to the Paris Agreement.

It is widely assumed that sanctions against Russia will be reversed under Trump’s administration and Tillerson’s influence will further increase the likelihood of that. In the past Tillerson was quoted as opposing sanctions stating: “we always encourage the people who are making those decisions to consider the very broad collateral damage of who they are really harming”. He was likely referring to Exxon’s interests** but he was also implicating sanctions in the hardships imposed on the citizens of affected countries. He will likely also be opposed to any potential future expansion of Iranian sanctions.

* Agreement aimed at cutting down on carbon dioxide emissions internationally

** Tillerson currently owns $218 million in Exxon stock and would greatly benefit from improved relations with Russia. Exxon has a deal to explore the Kara Sea in Russia’s Arctic that is currently blocked by sanctions

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Terry Branstad – Ambassador to China

Terry Branstad has been nominated as Trump’s Ambassador to China. Trump has made a concerted effort to show that it will not be business as usual with China. On the diplomatic front, his conversation with Taiwan’s President Tsai Ing-wen* and his stated goal of using the one-China policy as a bargaining chip in trade deals have both been inflammatory. Trump has railed against the loss of manufacturing jobs and targeted China as the primary source of blame. He has also accused China of manipulating its currency and engaging in unfair trade practices, intellectual property theft and unfair labor and environmental practices.

In Trump’s book, “The Art of the Deal”, he espoused the importance of “Use your leverage”. It may be that Trump sees the lead up to his presidency as his time to increase his/the USA’s leverage. By unsettling all previous assumptions regarding Sino-US relations he appears to be preparing for a major reset in the relationship. His appointments for spearheading the negotiation appear to be “Good Cop, Bad Cop” candidates, with Terry Branstad assuming the role of “Good Cop” and Peter Navarro (Trade Czar) playing the role of “Bad Cop”.

Terry Branstad is the governor of Iowa and is the longest serving governor in US history. Iowa enjoys strong economic ties with China and has seen its agricultural exports (Corn and Soybean) grow more than 13-fold since 2000 to a current value exceeding $6.3 billion**. Any pending trade war would hurt Iowa and other Republican controlled agricultural states. There is uncertainty over how many manufacturing jobs would be brought back home - 5 million have been lost since 2000. Automation advances make it unlikely that there will ever be a recovery of those jobs to any significant level. However, the loss of agriculture related jobs due to a trade war with China and possible cancellation of the Trans Pacific Partnership (TPP) is guaranteed to be significant.

35

EXPECTED IMPACT

Relations between China and the USA will undergo a reshaping under the Trump administration. Campaign rhetoric and some of the initial appointments have indicated that there will be a much more contentious relationship between the World’s two largest economies.

Trade and Tariffs changes, territorial disputes, one-China policy acceptance and the battle for influence in South East Asia and beyond have potential for this relationship to sour to a very serious state without careful guidance. Branstad will be a crucial figure in managing the relationship and ensuring things do not devolve in ways that could trigger economic hardship for both countries or, much worse still, military conflict

* Since 1979, the US has officially recognized the one-China policy which asserts that Taiwan is a part of a single unified China, diplomatic ties between the US and Taiwan have not been at the Presidential level

** https://www.washingtonpost.cand om/news/powerpost/wp/2016/12/07/trump-picks-iowa-gov-terry-branstad-a-friend-of-chinas-leader-as-beijing-ambassador/?utm_term=.023f00e026e1

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Peter Navarro – Trade Czar

Peter Navarro has been appointed as Trump’s new director of trade and industrial policy (Trade Czar).

Navarro’s end goal will be to improve GDP in the USA:

GDP = Consumption + Investment + Government Spending + Trade Balance

In particular, he will be directly responsible for the Trade Balance variable in the equation, or more specifically what he perceives as a Trade Imbalance between China and the USA. He is the author of “The Coming China Wars” and “Crouching Tiger: What China’s Militarism Means for the World”. He views the relationship dependency between China and the USA as being heavily one sided in the USA’s favor and believes that the US can exert much more influence on China with respect to its interactions with the US and the rest of the world. He has been highly critical of China’s inclusion in the WTO* under Bill Clinton, attributing it to a 50% reduction in the US economy.

Predictably, his appointment has been met with disparagement by the Chinese government. Navarro will work closely with Terry Branstad on China policy and help forge the new relationship between the two economic superpowers.

Free Trade Agreements will also be part of Navarro’s responsibility. Any renegotiation of NAFTA, approval of TPP and potential Trade deals with Europe and Great Britain will be negotiated with Navarro as a central figure. If history is an indicator, Navarro will be a hawkish advocate for US protectionism.

His stated tenets for any country to trade with America are:

1. You increase the GDP growth rate

2. You decrease the trade deficit

3. You strengthen the manufacturing base

Looking at the GDP equation and focusing solely on the Trade Balance downplays the Investment variable where China also plays a significant role. If a trade war or reset in relations

37

EXPECTED IMPACT

Navarro has proposed a 43% tariff on Chinese exports. This will drive up consumer costs within the US (disproportionately impacting the lower income demographics of the population) and spark reciprocal trade retaliation from China impacting our export oriented sectors such as agriculture.

The charge that China supplements exports of certain commodities such as steel and aluminum is validated and there is a direct correlation to loss of jobs and business in those industries here in the US. However, it is also true that the US does the same with its agribusiness, pharmaceutical and other sectors.

There is a need for dialog about, and a binding forum for how to redress these issues. This is not just a Sino-US issue. It is a common problem that is being faced in other sectors and international relationships (e.g. Airline industries and middle eastern supplements). The WTO was intended to be an authority used to address these complaints but its resolutions are often ignored by parties when the outcomes do not meet their self-interests.

incents China to withdraw its investments in the US economy, there would be a huge impact. China recently lost its role as the top foreign owner to Japan, but it still owns over $1.1 trillion in US Debt out of almost $6 trillion total foreign owned sovereign debt**. While it would be infeasible for China to divest of its current sovereign debt holdings (it would result in a big reduction of exports from China to the US), it could potentially trigger a crisis in confidence reducing demand from other financial actors sparking a domestic crisis.

* World Trade Organization

** http://chinapower.csis.org/us-debt/

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Nikki Haley – US Ambassador to the United Nations

Trump has nominated Nikki Haley as the US Ambassador to the United Nations. In a cabinet mostly filled with white older men, Haley adds some notably missing diversity. She is a popular Governor of South Carolina and was widely praised for her response to the Dylan Roof shootings in Charleston in 2015. The nomination has been criticized due to her lack of international experience.

Haley will be stepping in as the representative to the UN at time when Trump has assailed the World body as largely losing its relevance. He has criticized recent resolutions, most notably a recent resolution condemning expanding settlements in East Jerusalem and the West Bank. Trump urged vetoing the resolution arguing that “peace between the Israelis and the Palestinians will only come through direct negotiations between parties and not through the imposition of terms by the United Nations”. It is likely that Trump will seek to penalize the UN through funding cuts. Haley will be assuming the Ambassador at a time when the Administration is seeking to diminish the role of the body on the International stage.

39

EXPECTED IMPACT

Trump is seeking to diminish the role of The UN on the international stage. It is unlikely that given this backdrop, Haley will expert much influence on foreign policy and US relationships internationally.

TBD – Trade Representative

Trump has not named a Trade Representative. This role has traditionally served as the official trade envoy for the President, but with the appointment of Navarro and the role of Wilbur Ross in developing trade policy, it is unlikely that this position will hold significant power.

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EXPECTED IMPACTMinimal impact as traditional functions that this role served will now be handled by Peter Navarro and Wilbur Ross.

Legal/Consultative Roles

Introduction

This grouping of Cabinet Members plays a highly political role in Trump’s administration. Priebus, Bannon, Sessions, Miller and McGahn are all ideological champions of the right and their selections generated objections from the left. Sessions will have a huge impact on the new administration in his role as Attorney General. He will be the US governments representation in legal battles. Sessions conservative ideology will shape US arguments in litigation relating to environmental issues, labor issues, education choice issues, trade issues, human rights issues and much more.

The Nominees

41


Reince PriebusChief of Staff

Steve BannonChief Strategist and Counselor Jeff Sessions

Attorney General

Stephen MillerSenior Advisor

to the President for Policy

Donald McGahnWhite House

Counsel

TBDPress Secretary

Jeff Sessions – Attorney General

Jeff Sessions is Trump’s selection for Attorney General. The Attorney General is a powerful cabinet position and serves as the head of the Department of Justice. The principal duties of the Attorney General are to:

• Represent the US in legal matters

• Supervise the activities of the Department of Justice

• Provide legal advice and opinions to the President and the Cabinet.

• Provide recommendations to the President concerning appointments to federal judicial positions

• Represent the US Government in the Supreme Court

Sessions has a reputation of leaning right on legal issues and has been criticized by the left for his position on issues such as immigration and race. Key cases Sessions will likely be involved in include:

• FBI vs. Apple (and other personal privacy vs security cases)

• Guantanamo

• The proposed Muslim Registry (conjecture)

• Marijuana laws (conjecture)

Clearly Sessions will have a significant role in shaping the legal presence of the government under the Trump Administration. Given Trump’s willingness to wade into controversial territory, Sessions will likely be one of the most influential Attorney Generals.

Trumps influence on the Supreme Court was a big theme in the election campaign. Sessions will be his key advisor in selecting

42

EXPECTED IMPACT

Having a strongly conservative candidate for Attorney General is a strong indication of direction the government intends to take in legal matters. The influence on Government cases will likely be conservative and the advice provided in the selection of supreme court nominees, and other judicial nominees, will likely nudge the judiciary firmly to the right.

appointees for openings and recommending candidates. The influence those individuals have will far outlive the other impacts of the Trump Administration.

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Development & Infrastructure Roles

Introduction

On the campaign trail Trumps promise to “Make America Great Again” emphasized priorities that will be handled by this group of Cabinet members. Growing small businesses, changing how we use our land and resources, and improving infrastructure will be top priorities. Linda McMahon, Ryan Zinke and Elaine Chao are the proposed leaders to lead those initiatives.

Elaine Chao was a surprise nomination considering her deep political ties and association with the Washington bureaucracy that Trump criticized repeatedly. Her selection is an indication of Trump’s willingness to work with anyone if he feels they can further his goals.

Ben Carson’s selection as the Secretary of Housing and Urban Development was another surprise given his lack of political or management experience. Carson’s selection appears to be an example of Trump’s loyalty and patronage as opposed to a strategic fit.

The nominee for Secretary of Agriculture is still pending. The candidate who fills this role will be faced with the consequences of any future trade wars with China that will affect the export of American agricultural produce.

Zinke’s nomination provides the Game of Thrones theme in this group. As a strong conservationist, he will be pitted against Rick Perry - Energy Secretary, and Scott Pruitt- Environmental Protection Agency administrator, in a battle of business vs. nature. The nominee for Secretary of Agriculture will probably join the free trade side in the battle over protectionism vs. free trade.

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The Nominees

45


Linda McMahonAdministrator of the

Small Business Administration

Ryan ZinkeSecretary of the

Interior

Ben CarsonSecretary of

Housing and Urban Development

Elaine ChaoSecretary of

Transportation

TBDSecretary of Agriculture

Linda McMahon – Administrator of the Small Business Administration

Linda McMahon, the former CEO of World Wrestling Entertainiment has been nominated as the admnistrator of the Small Business Administration. She will be tasked with growing American small businesses which she has called “the largest source of job creation in our country”.

The Small Business Administration (SBA) was established in 1953 to help Americans start, build and grow businesses. It was primarily created as a response to the Great Depression (The Reconstruction Finance Corporation – SBAs predecessor) and World War II. It provides assistance in the form of grants, loans, loan guarantees, contracts and conselling sessions. The SBA also provides specialized outreach to women, minorities and armed forces veterans.

The current budget of the SBA is approximately $700 million. It is likely that under Trump, that will increase to at least $1 billion. One of the key goals of the SBA is the creation of 21st

century jobs in the areas of high technology and advanced manufacturing. Trump has a stated goal of bringing manufacturing back to the USA but in order to do so, training will be needed and small business will need to be created. McMahon will play a crucial role in the successful repatriation of manufacturing jobs.

The agency currently has an Impact Investment initiative that is responsible for investment in innovative manufacturing businesses. This will likely be given more power and funding as Trump sees potential for public and private funding to to scale up advanced manufacturing technologies. These new technologies would not only serve the domestic market, they would also make America more competitive internationally.

46

EXPECTED IMPACT

The Small Business Administration will be a critical agency in Trumps plan to bring manufacturing jobs back to the USA. Linda McMahon will be tasked with setting up the capabilities to train American workers, create small businesses to hire them, and advance American manufacturing capabilities to be more competitive on a global stage.

The agency will need additional funding to accomplish these goals and the 2017 budget will likely be close to $1 billion.

Ryan Zinke – Secretary of the Interior

Former Navy Seal Ryan Zinke is the nominee for Secretary of the Interior. Zinke is currently a Congressman from Montana and has built a reputation as a strong supporter of conservation and federal protection of public lands. In his new role, Zinke would be responsible for managing approximately one fifth of the country’s land. That land includes national parks, wildlife refuges and tribal lands. He would oversee lands currently under consideration for drilling, mining, wind and solar development and oil and gas pipelines.

Zinke will be reponsible for some aspects of the energy issues that Trump campaigned on. Trump pledged to end limits on offshore drilling, lift the Interior Department’s freeze on new coal leases and ease federal fracking regulations. Trump’s denial of climate change is something that Zinke has publicly disagreed with. He was quoted as saying: “if you go up to Glacier Park and you have your lunch on one of those glaciers, you will see the glacier recede while you eat lynch. So you know I have seen the change in my lifetime”. He has called for a “prudent” approach to combat climate change and is wary of the imapct to the coal industry. Montana, his home state, is the 6th largest coal producing state in the USA.

In the last few months of Obama’s second term, large areas of the Arctic and Atlantic oceans were designated as off limits to offshore oil and gas drilling. This was accomplished with a law called the Outer Continental Shelf Lands Act. Hundreds of millions of acres of federally owned land, controlled by the Interior Department, are now protected. Obama claims that the actions to preserve those lands cannot be undone by an incoming president, but it may be possible for it to be undone by the Republican-controlled Congress. Zinke may be asked to unravel the protections, a task which would likely take several years and a lengthy court battle. Currently the Arctic accounts for approximately 10% of the nations oil production.

Zinke will also play a key role in the ongoing battles over building of oil pipelines across the country.

47

EXPECTED IMPACT

As the steward of 20% of the USA’s land, Zinke will be a large player in future debates about the risk/rewards of using federal lands for oil, gas, and coal extraction. Trump has pledged to be much more energy industry biased at the expense of conservation and climate change. Zinke will be responsible for supporting his goals.

His record in Congress indicates he is willing to fight for conservation and he is likely to be a forceful advocate for protecting US lands, waters, and climate. In the past, he has shown a willingness to go against his party in Congress to protect federal lands. He may find himself in that position more frequently under the Trump administration.

The current budget for the Interior Department is approximately $20 million. That number is unlikely to change significantly.

Ben Carson – Secretary of Housing and Urban Development

Retired neurosurgeon Ben Carson is Trump’s nominee for Secretary of Housing and Urban Development. Trump has proposed an urban renewal agenda with a focus on economic revival including US inner cities. Carson will oversee the agency with a $47 billion budget. He has no political experience and has never run a large bureaucracy. In the past he has expressed philosophical opposition to government programs that encourage a cycle of “dependency”. His agency will oversee programs that provide food vouchers , provide rental assistance and help impoverished home owners avoid foreclosures. These programs appear to be at odds with Carson’s dependency reservations.

Little can be inferred about how Carson will tackle his new role and how he plans to meet Trump’s goals but we do know that he is opposed to Obama’s “Affirmatively Furthering Fair Housing” regulation. That legislation was intended to counter segregation by encouraging affluent neighborhoods to build affordable housing. Carson considered the measures in the regulation to constitute government overreach.

In the past Carson has emphasized that bootstrapping the underprivileged is a task that should fall to churches and other non government organizations. It is uncertain how he plans to run the agency and what programs he intends to introduce to replace the ones he has previously been critical of, but Trump has expressed confidence in his ability and Carson has hesitantly agreed to take on the position.

48

EXPECTED IMPACT

Unknown now. Carson does not have a strong history of statements or actions that can lead us to infer how he will lead HUD. Trump’s Infrastructure ambitions will likely provide him an even larger budget if Carson can devise a cohesive plan to spend the money. His tenure at the agency may well reflect his surgical amputation skills if he decides to cut government involvement and reduce the federal role in favor of community organizations such as churches.

Elaine Chao – Secretary of Transportation

Trump has chosen Washington insider Elaine Chao to be his Transportation Secretary. During the campaign Trump railed against Washington career politicians and the selection of Chao seems to be an odd selection for such a critical post. But, her selection may signal Trump’s acceptance of the need to surround himself with people that can help him advance the most ambitious parts of his agenda regardless of their incongruence with his “drain the swamp” philosophy. Trump has said that infrastructure investment and redevelopment will be a priority of his first 100 days in office. Chao’s experience, both politically and personally, will be valuable assets in engaging the required centers of power in the capital. She will likely leverage her husband, Senate leader Mitch McConnell, to persuade the Senate to support her priorities.

In one of her previous roles she served as Labor secretary and she was accused of being too cozy with business interests. In her non-government career, Chao serves on the Board of Wells Fargo and, more relevant to her nomination, she was a banker for Citicorp and helped close transactions that involved transportation financing.

She will need to think creatively and heavily lean on her personal experience and political connections to progress the heavily publicized goal of improving the nation’s aging infrastructure. Elaine will be working closely with Gary Cohn to plan out and implement the infrastructure revival strategy.

It remains to be seen whether investments will be made in high speed rail in addition to traditional outlets such as highways, bridges, airports, subway and train systems and harbors. There is much debate about the wisdom of adopting a full free market approach to infrastructure with private ownership of everything from toll roads and bridges to airports. Decisions will have to be weighed against security concerns and the monetization of community infrastructure.

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EXPECTED IMPACT

Infrastructure investments are a key component of Trumps future for his administration. Elaine Chao will be a central figure in planning improvements, budgeting investment requirements and setting up appropriate channels for the distribution of funds.

Trump has indicated that making funds available for her department will be a priority, but the mechanism for pursuing infrastructure development will require a balance between private and government spending.

TBD – Secretary of Agriculture

Trump has not yet anounced a nominee for the Secretary of Agriculture. The Secretary will be responsible for heading the US Department of Agriculture (USDA). The Department consists of:

Farm and Foreign Agricultural Service – focuses on supporting a sustainable and competitive US agricultural system

United States Forest Service – manages national forests and grasslands

United States Food Safety and Inspection Service – ensures the safety of food produced and sold in the USA

Food Stamp Program – works to provide food to low-income people

United States Cooperative State Research, Education, and Extension Service – provides advice to farers and gadeners in the USA

One of the leading candidates for the post is former California Lt. Gov. Abel Maldonado. Maldonado is the son of Mexican-American farmers. Trump is eager to please rural supporters who were a key reason for his success at the polls as well the country’s increasingly diverse farmers and farm workers.

The USDA is responsible for helping farmers with price support subsidies. This has been criticized internationally as providing an unfair advantage to US farmers in the global trade of farmed produce. The likely future trade war with China will likely bring this issue up. The US accuses China of subsidizing export oriented companies and creating an unfair advantage in the trade balance. If tariffs are imposed to combat this, it is likely that reciprocal tariffs will be imposed on US agricultural imports which are subsidized by the US government.

The USDA budget for 2016 was $156 billion, with Nutrition Assistance comprising 73% of the budget. *

51

EXPECTED IMPACT

Major changes are not anticipated until other factors such as a trade war necessitate a response. If US exports drop because of a trade war, increased support will be necessary for the nation’s farmers.

* Over the course of a year, one in four Americans will be served by one of USDA’s nutrition assistance programs designed to prevent hunger and obesity. Successful implementation of the Healthy, Hunger Free Kids Act has provided significant improvements in the nutritional quality of school meals, with 97 percent of participating schools meeting the improved meal standards. In addition to improving access to healthy foods, USDA provides nutrition education and engages in targeted outreach to ensure Americans are equipped to make healthy choices. USDA has also made significant improvements in program delivery, with a BUDGET HIGHLIGHTS 9 reduction in Supplemental Nutrition Assistance Program (SNAP) payment errors by about 15 percent between 2009 and 2014 - http://www.obpa.usda.gov/budsum/fy17budsum.pdf

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Education & Healthcare Roles

Introduction

“Change is the law of life and those who look only to the past or present are certain to miss the future”

John F. Kennedy

This group of Cabinet members will lead their respective agencies through major change under the new Administration. Tom Price will be responsible for repealing and replacing the Affordable Care Act (better known as Obamacare). Seema Verma will need to adapt to the side effects of a repeal on the two popular programs she heads, Medicare and Medicaid. Betsy Devos is expected to spearhead a major shakeup in the way federal funding is used for education from kindergarten through to grade 12. The new Secretary of Veteran Affairs will oversee the increasing privatization of care to US veterans.

Price and Devos are established conservative figureheads with histories that strongly imply the approaches we can expect to see them take to lead their agencies. Both are expected to face legal battles and strong resistance in the pursuit of their visions.

Trump campaigned very hard on repealing Obamacare. After winning the election and meeting with Obama, he appeared to ease up his criticism of the act and indicated that he may be willing to keep large parts of it and tweak as opposed to repeal the legislation. Price is likely to push back on that and seek a full repeal as he has advocated for as a sitting Congressman.

53

The Nominees

54


Tom PriceSecretary of Health

and Human Services

Seema VermaAdministrator of the Centers for Medicare and

Medicaid Services

Betsy DevosSecretary of Education

TBDSecretary of

Veteran Affairs

Tom Price – Secretary of Health and Human Services

One of Trump’s central goals during his campaign was the repeal of the Affordable Care Act*. By selecting Dr. Tom Price as the Secretary of Health and Human Services, he has gained a like-minded opponent of the 6-year-old law. Price is an orthopedic surgeon from Atlanta turned politician and is currently a Congressman who has been involved in past efforts to roll back the ACA and replace it with a proposal that would move away from mandated coverage and more towards a free-market approach. Critics of Price’s proposal argue that there would be too few consumer protections and too few regulations for medical professionals.

Under the ACA, approximately 20 million uninsured people have gained coverage and the uninsured rate has dropped to the lowest rate on record (8.6%). Trump and Price will need to be wary of political backlash if those figures are reversed and post the election, Trump has indicated that there is some logic to retaining parts of the ACA and only focusing on “tweaking” it. Price has a more aggressive plan to rip and replace the Act. His previous bill, The Empowering Patients First Act** sought to adjust some key focal points of Obama’s legislation:

• Insurers would have the right to deny coverage or charged higher rates for people with pre-existing medical conditions. There would be federal grants offered to states for “high-risk pools” to subsidize insurance for individuals who might otherwise have difficulty finding coverage

• There would be no tax penalty for Americans who do not have insurance coverage

• The expanded eligibility for Medicaid would be repealed and go back to pre-ACA levels

• Tax credits would be awarded to individuals or families for private insurance expenses

55

EXPECTED IMPACT

Fundamental changes to health care provision, insurance coverage and government regulation will require a huge cost to implement. As with the implementation of Obamacare, the repeal will require tremendous support from the IT community.

Opportunities to stream line insurance company products and cross-state efficiencies will advantage early adopters, Strategic planning and cost allocation for technological innovation is necessary with room for innovative thinking and creative use of technologies like Big Data and BPM.

Changes to the functionality of State exchanges and elimination of the Federal exchange will have a big impact.

If the uninsured rate creeps up, there will be a human cost associated. For those affected, there will be a trend towards emergency room/ambulatory care as opposed to preventative care and there will likely be necessary changes to accommodate this reactionary health care approach in 2017 and beyond.

• A higher burden of proof would be placed of patients in cases of medical malpractice

• Doctors would be given more leeway to negotiate private contracts with Medicare beneficiaries allowing them to bypass the fees negotiated for Medicare

• The Federal Health Insurance exchange would be eliminated

• Insurers licensed in one state would be allowed to sell policies to residents of other states

• For Americans getting their insurance through their employers, there would be new limits on how much coverage would be tax free - $8,000 for an individual and $20,000 for a family ***

The Health and Human Services 2016 budget provided approximately $84 billion in discretionary funding.

* Affordable Care Act (ACA) better known as Obamacare

** Empowering Patients First Act of 2015 is the proposed replacement for ACA authored by Dr. Price

*** there is a 40% excise tax on the difference of any amount more than the limits. 2018 proposed limits are $10,200 for singles and $27,500 for families

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Betsy Devos – Secretary of Education

Betsy Devos has been nominated as the Secretary of Education. Devos has been an outspoken advocate of expanded school choice for the past 28 years. She strongly believes that parents should have a bigger say in how and where their children are educated. Devos has been involved in battles with Teacher’s unions in dozens of states over charter schools and private school vouchers. She believes that government funding of education from kindergarten to grade 12 (K-12) should be spent on the education choices that parents make not just on traditional public schools. This would allow government funds to be used for private schools or virtual schools. All schools would be held accountable to federal and state standards and underperforming schools would be forced to improve their performance.

One criticism of the school choice funding is that federal funds would be used to teach religion at many schools. Religious beliefs and rules could prevent some children, particularly girls, from participating in activities that are currently available at public schools.

Teacher’s unions are also opposed to the use of federal funds for anything other than traditional public schools. Opening the door to funds following students regardless of where they get their education would reduce union power and shrink budgets at unionized schools.

Devos also champions shrinking the role of the federal government in K-12 education. She is an advocate of stronger state and local control. She opposes Common Core or any other set of standards imposed on states by the federal government.

Devos’ vision for post-secondary education is less clear. She has expressed interest in making sure low-income students have an opportunity for good education and positive outcomes, but how that will play out in her oversight and regulation of post-secondary institutions and provision of financial aid from the federal government is still unknown. Hillary Clinton pledged to prioritize improving higher education in the country, but that focus has been diminished with trump’s win and Devos’

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EXPECTED IMPACT

The departments focus will be on promoting school choice and reducing the role of the federal government in K-12 education. We can expect an increase in the number and size of private schools. Higher education will likely take a backseat on the priority list and major changes are not likely early on in Devos’ tenure as Secretary.

Liberal groups and Teacher’s unions are likely to fight the proposed changes and there will likely be court cases with the legal objection being the use of federal tax dollars for religious education.

Trump was looking for a change agent in his nomination of Devos and increasing school choice would be a radical change to the status quo.

nomination. The Education department currently has a budget of approximately $40 billion for K-12 education and $20 billion for post-secondary education

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TBD - Secretary of Veteran Affairs

Trump pilloried the Department of Veteran Affairs on the campaign trail calling it the “most corrupt” and “most incompetently run agency in the United States”. He has indicated that he is very open to increasing the role of the private health care sector in caring for US veterans. It is likely that his candidate for the role will ruffle feathers as he has hinted that he will severely shake up the status quo at the agency.

Private Health Care organizations can expect to gain access to the large Veteran Care market under Trump. Exactly how that will work and how the funding will be applied is yet to be determined. Will there be a Veteran’s version of Medicare/Medicaid? Will there be a vetting process for approved private Health Care Providers? What will the impact be on existing VA Facilities? The only certainty is that change is imminent and likely very substantial.

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EXPECTED IMPACT

Care for US Veterans of war will undergo significant change under the Trump Administration. Exactly how that change will be implemented and by whom is still unknown. Private health care providers are going to be the likely beneficiaries of the new care structure.

Energy, Labor & Environment Roles

Introduction

Critics of Trump have accused him of being naïve to the damage humans are doing to the planet. Those critics will be disheartened by Trump’s selection of leaders to lead his Energy and Environmental Protection Agencies. Both nominees, Rick Perry and Scott Pruitt, have previously fought legal battles against the agencies they will now be taking over. Rick Perry even called for the elimination of the Energy Department he will oversee. It seems highly unlikely that Perry understood that 60% of the budget of his Agency is for the oversight of America’s nuclear program. It seems inconceivable that Perry would advocate for eliminating a department so central to national defense. Trump has promised to advance America’s nuclear capabilities and invest in modernizing the country’s nuclear arsenal.

Perry’s selection seems to have been motivated by his ties to big oil and the connections he established with the industry in his role as Governor of Texas.

Both Perry and Pruitt will likely but heads with Zinke in the Interior Department on issues of protecting nature at the expense of business interests.

Andrew Pudzer will take over the reins at the Department of Labor. His influence will be felt in changes to the Federal minimum wage and immigrant worker and visa programs.

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The Nominees

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Rick PerrySecretary of

Energy

Scott PruittEnvironmental

Protection Agency Administrator

Andrew Pudzer Secretary of Labor

Rick Perry – Secretary of Energy

Rick Perry will be taking over a cabinet position he once said he wanted to eliminate. Like Donald Trump, Mr. Perry is sceptic of the role of humans in climate change. In his role as Governor of Texas, Perry has a history of suing the agency he is now set to lead and seeking to dismantle its rules and authority

Contrary to popular belief, the Energy department is devoted to national security and basic science much more than to the extraction of fossil fuels. The department plays the leading role in designing nuclear weapons, ensuring the safety and reliability of the existing nuclear arsenal, and thwarting the proliferation of nuclear weapons internationally. About 60% of the department’s budget is devoted to the National Nuclear Security Administration. The department was instrumental in helping secure the Iran deal and will be called on in any future discussions to amend that deal.

On Thursday Dec 22, 2016 Trump made a Twitter post that said the United States "must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes."

The implications of this tweet to the nuclear non-proliferation movement are very significant and much clarity is being sought. Will this trigger a new arms race? When posed the question by MSNBC's Mika Brzezinski Trump responded: "Let it be an arms race. We will outmatch them at every pass and outlast them all."

Uranium producers and a nuclear fuel technology companies are likely big beneficiaries of any new strategic pivot to nuclear expansion.

Research and Development in this field such as the work being done at Argonne National Laboratory will likely see additional funding with emphasis on weaponization of scientific advances. The Argonne 2015 budget was $760 million. Assuming the nuclear comments are not bluster, that budget will likely at

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EXPECTED IMPACT

Perry will likely be tasked by Donald Trump with modernizing US nuclear capabilities. It can be assumed that there will be a significant investment in that initiative and the department will likely see an increase in its operating budget.

There will be an R&D pivot from clean energy and renewable power to nuclear and other weapon advances.

Uranium producers, nuclear fuel technology companies and traditional defense technology contractors will benefit.

The Iran deal will be re-examined and the potential impact of a termination of the deal would be huge and felt globally.

Drilling and prospecting will likely see increases in their budgets. Renewable energy initiatives and clean energy research grants will likely be significantly cut.

Having Rex Tillerson as the Secretary of State will probably further bolster the prospect for Oil and Gas, and supporting service companies in the US. IT spend on the energy sector will likely see a major increase.

least double within the 4 years of Trump’s presidency. With a large presence in Texas, Argonne will likely also be a focus for Mr. Perry.

Under Obama, the Department of Energy established the advanced Research Projects Agency-Energy to support breakthrough research on clean energy technology. There is a possibility that Perry will seek to diminish the role of renewable energy and climate change programs that the department manages. There has already been an outreach to employees of the department to try to identify all employees and contractors who have attended climate change policy conferences. This request was met with resistance and the agency refused to give the names.

Perry is expected to be a boon to the coal and oil industries. Trump has stated that – “My administration is going to make sure that we take advantage of our huge natural resource deposits to make America energy independent and create cast new wealth for our nation”. The Obama administration focused on renewable energy, issuing more than $30 billion in loans since the stimulus package in 2009. It has also overseen the expansion of hydraulic fracturing technology as a source of US oil production. Fracking now accounts for more than half of the country’s oil output up from less than 2% at the turn of the century.

Perry serves as director at Energy Transfer Partners, which is developing the Dakota Access Pipeline. The new administration is likely to be much more pipeline construction friendly and less concerned with the potential environmental concerns. The Army Corps of Engineers will need to approve permits. There will also likely be an expansion of drilling on federal land, which will require approval from the Interior Department.

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Scott Pruitt – Environmental Protection Agency Administrator

Scott Pruitt is Trump’s nominee to lead the Environmental Protection Agency (EPA). This is one of the more controversial cabinet picks as Pruitt has a history of activism as an anti-regulation, climate change skeptic. If confirmed, we can logically expect the agency to undergo major changes.

The EPA was created by Richard Nixon with the motivation being that – “Clean air and clean water, the wise use of our land, the protection of wildlife and natural beauty, parks for all to enjoy – these are the birthright of every American” *. The most common threats to these tenets have been big business and industry that value profits over environmental risk. As attorney general of Oklahoma, Pruitt was an ardent opponent of the agency and defender of state, industry, and business rights.

Given Pruitt’s activist background as an opponent of the agency he is now tasked with leading it is likely that there will be a shift towards curbing its powers and limiting its mandate. He will have the power and likely the will to slow down enforcement of environmental rules, limit agency budgets and give more autonomy to the individual states to make and enforce environmental rules. Trump has vowed that in his first 100 days he’ll roll back Obama-era regulations on the fossil fuel industry, bringing back jobs to coal country

Pruitt’s skepticism on human culpability in climate change is likely to be one of the early focal points in his agency. He is expected to target Obama’s climate regulation, known as the Clean Power Plan, a suite of limits on power plants' greenhouse gas pollution that is awaiting a crucial ruling from a federal appellate court. Pruitt has been one of the leading challengers against that and other EPA regulations in his role as Oklahoma's attorney general. He will also be heavily involved in cases such as the “Waters of the United States” currently being contested by the farming, oil and development industries, and a new standard for smog.

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EXPECTED IMPACT

Most of Obama’s regulations will be very difficult for Trump and Pruitt to roll back. However, there will be a definite shift to a more business/industry friendly EPA. Energy, manufacturing, Automobile, and Airline sectors will not have the same urgency to focus on environmental impacts and budgets associated with regulation adherence may shrink.

He will also play a major role in making regulations targeting car emissions standards, limiting carbon emissions from aircraft, ensuring hard-rock miners and other industries can pay for environmental cleanups.

* Richard Nixon

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Andrew Pudzer – Secretary of Labor

Puzder likely wouldn't have much to do with setting economic policy -- he would be the chief workplace regulator and the government's negotiator with its public employee unions.

His focus will be on working to advance policies that will protect American workers, reduce labor regulations, and establish new immigration controls with a focus on protecting/improving the prospects for American workers

There are some notable differences in Pudzer’s view and those of Donald Trump.

• He is opposed to government incentives for businesses (like the Carrier deal) and is also opposed to mass deportation of undocumented immigrants – “We believe that deporting 11 million people is unworkable, and we hope that in the end Mr. Trump comes to this same conclusion” *

• He is opposed to protectionism and is pro free trade – “We are free traders and oppose punitive tariffs” *

• He is opposed to massive infrastructure spending – “To grow the economy, you don’t build a bridge – you build a business” **

• He is opposed to raising the federal minimum wage. Trump has at times indicated that he would consider raising the federal minimum wage to $10/hour from the current $7.25, but Pudzer has wavered on that commitment – “Don’t lock into the $10. $10 is a very high number, and it would kill jobs” ***. Pudzer has linked a $10 and hour minimum wage to a direct loss of 500,000 jobs

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EXPECTED IMPACT

Companies that rely on foreign workers will have a tougher time staffing positions in the US with workers from other countries. The cost of hiring local resources will be slightly higher than in today’s market.

• Curbs to visa programs and stricter compliance with exit dates following the expiration of visas

• Minimal raise in the federal minimum wage

• Moderating voice in movement to restrict free trade (but likely not a significant impact)

• Will seek to provide more structure and consistency in how businesses are incented to stay in the USA. One off involvement like the Carrier deal will likely still occur but Pudzer will seek a level playing field for all

Pudzer and Trump agree on the need to investigate current visa programs – reducing visa overstays is ‘reasonable and sensible given that voters demand action” *

* Joint Wall Street Journal with conservative economic writer Stephen Moore

** February speech to the Adam Smith Society

*** July interview with Fox Business

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Conclusion

All of Trump’s nominees have been successful in their previous careers. As a group, they can be described as aggressive, deal makers, highly ambitions and committed to the Trump brand. Their effectiveness will be determined by how well they can work together and under Trump. Trump has welcomed and encouraged opposing views in his nominees. How those views will merge into a set of cohesive stratagems for the Administration remains to be seen. One thing that is for certain is that there will be a sea change once Trump takes over the government on January 20 th, 2017. Opportunities will exist to take advantage of the upcoming change. Technology will be relied upon to facilitate the change.

In this paper, I have made certain inferences and assumptions that reflect my personal best guesses. While some of them may be oversimplified, premature, or outright incorrect, I believe collectively they are an informed and accurate predictor of trends that we will see once Trump takes office. The large trends will be:

simplifying and lowering taxes reducing government regulations creating a stronger armed forces more government spending on infrastructure and job repatriation re-examination of global trade with the US and the necessary protections new approaches to health care and education fewer restrictions on the oil and gas industries

The facts and details provided will allow you, the reader, to derive your own inferences and hopefully plan how to best prepare for the changes that this group of individuals will bring about in America.

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“It is not the strongest or the most intelligent who will survive but those who can best manage change”

Charles Darwin

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