he GOP is back in charge in the nation’s capital. Whether this makes me feel overjoyed, depressed, or somewhere in between, you need to be ready for the policy changes that come with the shift in political power.
Most immediately, we can expect a significant change in the Trump Administration’s use of the federal administrative agencies such as the Federal Trade Commission, National Labor Relations Board, and Department of Labor. During the Biden Administration, these agencies pushed controversial policies that had no chance of passing in a divided Congress. These policies include the regulation of so-called junk fees, click-to-cancel requirements for subscription services, increased pay requirements for salaried workers, and a ban on most non-compete agreements.
A second Trump Administration is likely to pull back on all or many of the most controversial Biden-era administrative policies. Moreover, the planned Department of Government Efficiency could push for deep cuts in the administrative state more broadly, further reducing the possibility of new regulations. Two exceptions to the scaling back of the administrative state are Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP). Although increased immigration enforcement is unlikely to have a direct effect on the self-storage industry, it could affect the vendors that some operators rely on in parts of the country with large immigrant labor pools.
Congress’ biggest early task will be addressing the expiring provisions of the Tax Cuts and Job Acts of 2017 (TCJA), or the so-called Trump tax cuts. Many of the provisions of the TCJA are scheduled to sunset at the end of 2025 unless renewed by Congress. Expiring provisions include individual tax rates, the pass-through income deduction, the bonus depreciation, and estate and gift tax exemptions.
Full GOP control of Congress and the White House means that tax laws can pass Congress without any votes from Democrats. However, that makes Republican leaders’ jobs only somewhat easier. We will certainly see battles within the GOP over the costs associated with renewing expiring TCJA provisions and whether to offset those costs with changes to tax benefits such as the 1031 exchange and carried interest exemption.
Finally, with the Democrats at least four years away from the possibility of full control in D.C., we may see certain state legislatures step in to fill the void on progressive policies. For example, California and Minnesota have already passed laws regarding so-called junk fees. Could more states follow now that the FTC’s proposed junk-fee regulation is unlikely to move forward? Or will we see Democratic-led states require higher salaries for overtime-exempt workers in response to inaction from the federal Labor Department?
Of course, this column just begins to scratch the surface on the policy changes that we can expect over the next four years. Does anyone want to talk about more and higher tariffs, less antitrust regulation, or endangered species status for cats and dogs in Springfield, Ohio? No, me neither. Anyway, it will be a busy four years in D.C. and state capitals across the country. Keep an eye on this page, the SSA’s website, and the SSA Magazine Weekly email to stay informed.