Update 863 – A Tariffying 100 Days:
GDP, Markets, Polling All in Retreat
Yesterday marked 100 days since Trump began his second term, a period marked by chaotic and unpredictable shifts in economic policy and a prioritization of Wall Street and the wealthy at the expense of everyday people. His administration, with acquiescence by congressional Republicans, announced sweeping and damaging tariffs, initiated unconstitutional dismissals of federal workers, allowed billionaire donor Elon Musk unprecedented access and influence to reshape the federal agencies, moved illegally to fire financial regulators, and set-up a reconciliation package pairing cuts to government assistance with tax cuts skewed to the wealthiest Americans.
The administration’s actions have already weakened the American economy, with data released this morning showing the economy contracted by 0.3 percent during the first quarter, the first quarter of negative growth since the first quarter of 2022, following a strong 2.4 percent growth in the fourth quarter of last year. Meanwhile, Trump’s approval rating has plummeted to historic lows. We review the economic policy and performance of the Trump administration’s first 100 days below.
Best,
Dana
In the first 100 days of his second term, President Trump has moved aggressively to reverse the work of the Biden administration by unwinding over 100 Biden-era executive orders and signing 142 of his own. The Trump administration has held this record up as a marker of productivity, but in reality, Trump has only signed a record-low five bills in his first 100 days, none of which is major legislation such as the reconciliation package, which is still months away from passage by Congress — and nothing to look forward to.
Most notably, over these first 100 days, Trump has laid off thousands of federal employees, seen his administration named in at least 210 lawsuits, and prompted a 6 percent fall in the S&P 500 since taking office, as of writing.
Combine this with the numerous scandals that have already rocked the administration, and it is little wonder that the most recent CNN poll has Trump’s approval at a dismal 41 percent, the lowest approval rating of any president at the 100-day mark in at least 80 years. Trump’s approval rating on the issues, even ones that were once his strong suit – such as immigration and the economy – has declined across the board.
Source: The Silver Bulletin
Focusing just on economic issues, Trump’s failure to work with Congress has had real consequences: tariffs which almost threw the economy into a recession (and still might), government institutions left crippled by unilateral staffing and funding cuts, and a hostile approach to trade that has alienated even America’s traditional allies.
Below, we review the administration’s agenda and actions from the first 100 days, focusing first on tariffs, DOGE, and financial policy. We then review his effort to move a reconciliation bill including tax cuts skewed to the ultra-wealthy – a process that has been front and center in Trump’s first 100 days but has yet to materialize.
Tariffs
Tariffs have been a hot topic since the moment Trump took office. On Day 1, he ordered federal agencies to investigate America’s trade policies and the practices of our trading partners. However, even 100 days in, there is still little clarity on what the Trump administration actually wants out of its trade and tariff policy.
Trump’s Liberation Day tariffs – which we covered in much more detail in a past newsletter – sparked historic uncertainty and rattled the markets into an almost immediate and drastic drop of over $11 trillion. The American financial system’s place as a relative safe haven vanished as quickly as many Americans’ 401k portfolios. The market posted its worst 100 days for the beginning of a presidency since Nixon in the 1970s, with indexes dropping 8 percent since Trump’s inauguration.
While the historic dip has seen some recovery since pauses have been announced and the administration hints at possible trade negotiations – without evidence or work to show for them – some investors are feeling slightly more reassured. From correction territory to bear market fears, the stock market still hangs in the balance, just waiting for Trump’s next post on Truth Social or X.
In his first 100 days, the President held firm on his trade policy and did not blink when the stock market tumbled. That said, when the bond market began to shake, it caught his attention. The initial sell-off in US Treasury bonds led to higher yields with the 2-year notes rising by 0.3 percentage points in the days following the “Liberation Day” announcement – their biggest move in over a decade.
Some of the recovery in the markets can be explained by rumored negotiation deals. Trump and his cabinet continue to tout upwards of 100 ongoing negotiations as countries allegedly rush to strike deals in the hopes of lowering their tariff rates. Even though the President promised “90 deals in 90 days,” we have yet to see a single deal. All eyes have been on China as the Trump administration claims there are high-level bilateral talks, although the Chinese have yet to confirm this.
While Americans have been vaguely familiar with tariffs from Trump’s first term, the salience of the concept has never been higher. Tariffs – a once rarely used economic tool – have transformed into the center of kitchen table discussions. To nobody’s surprise, the more Americans learn about how tariffs work – and how they affect their wallets – support has drastically deteriorated. According to the latest NYT-Siena College polling, only 43 percent of voters approve of his handling of the economy, compared to 64 percent of voters who approved of Trump’s handling of the economy in his first term, as polled last year. Polling out of NPR/PBS News/Marist offers even more damning results. It found only 39 percent of Americans approve of Trump’s handling of the economy. Even lower, 34 percent, was his approval rating on his tariff policy specifically. Voters were promised lower prices, and Americans are making it very clear they do not approve of how the President is pursuing policies that do not fulfill his promise.
Government Efficiency
Since 20/20 Vision covered what DOGE has been up to only a week ago, this will serve as a brief summary of what we already said rather than an in-depth analysis. As we stated previously, the so-called Department of Government Efficiency has been a colossal failure in eliminating waste, fraud, and abuse, but much more successful in empowering Trump and Musk.
An analysis from the Partnership for Public Service published a few days ago found that, even before considering the costs incurred by firing thousands of IRS employees and the long string of court cases, DOGE’s actions have cost taxpayers $135 billion instead of saving them $160 billion as DOGE claims. This cost increase is due mainly to the haphazard way DOGE has approached “reforming” the civil service, with issues such as putting tens of thousands of federal employees on paid leave, undermining productivity, and having to rehire workers after, for example, learning that they are essential to combatting the avian flu outbreak. Once lost tax revenue is included in the picture, the numbers are far worse, with the federal government projected to lose 10 percent of its annual revenue, or $500 billion, thanks to severe cuts to the IRS.
All of this for actions that are rather decidedly not improving government functionality. Taking a look just at Social Security:
- DOGE pushed for cuts to the Social Security Administration’s (SSA’s) phone services, only to backtrack after significant public outcry.
- DOGE’s handling of the SSA’s data means that the personal information for millions of Americans is at risk, prompting the courts to step in and restrict its access.
- The long list of cuts and disruptions at the SSA has raised the specter of delays or even the interruption of benefits for the 70 million Americans who rely on it.
DOGE and Musk have become focal points for blowback against the Trump administration. Musk’s popularity has absolutely cratered thanks to his involvement in politics, and his attempt to prove how much influence he has over electoral politics backfired when Brad Schimel, the conservative Wisconsin Supreme Court candidate, lost his election by double digits after Musk very prominently and publicly came out to support him. Between this embarrassment and trouble at Tesla, it is no surprise that Musk is taking a step back from working at the administration, though he has no intention of leaving it entirely.
That said, DOGE is still alive and well, and it is still making disastrously bad decisions. According to a report by NPR on Monday, classified networks holding crucial information about America’s nuclear weapons are now accessible to two DOGE staffers with no training or experience in handling classified information. With recent events such as Hegseth’s Signal scandal proving the importance of competently handling America’s secrets lest they fall into the wrong hands, the fact that Musk’s cronies are now handling this information despite the distinct lack of qualifications to do so should be a concern for everybody.
Undermining Financial Regulators
The Trump administration has aggressively moved to diminish and politicize America’s financial regulatory framework to the benefit of the financial industry and with serious risk to consumers, retail investors, and financial stability.
The administration has sought to dismantle entirely the Consumer Financial Protection Bureau (CFPB), the federal consumer watchdog created in the aftermath of the 2008 financial crisis. The administration has tried to cut the agency’s workforce illegally from 1,700 to about 200 and largely stop employees from working, even in defiance of court orders. Employees have largely been reinstated for now following legal action. Investigations into fraudulent and predatory financial firms have been disrupted, scaled back, and halted. Numerous lawsuits against such firms have been abandoned by the agency.
At the Securities Exchange Commission (SEC) – which regulates the securities industry and protects investors – staff has been cut by 16 percent. This is particularly concerning given that the agency was already underresourced.
The Trump administration has also sought to illegally undermine the independence of financial regulators and increasingly bring them under the heel of the executive. In just the past few weeks, Trump has pressured Fed Chair Jerome Powell to lower interest rates, said that Powell’s termination “cannot come fast enough,” and walked back suggestions of potentially attempting to fire Powell before the end of his term.
Additionally, Trump has sought to illegally fire democratic commissioners on multi-person bipartisan boards of independent agencies – the National Credit Union Administration (NCUA) and Federal Trade Commission (FTC). This leaves NCUA Chair Kyle Hauptman, who was first nominated to the board by Trump in 2020, as the only remaining board member. With only one member, the NCUA board now lacks a quorum, leaving it unable to make new policy. This also leaves just two commissioners, Chair Andrew Ferguson, who was selected by Trump to replace former Chair Lina Khan, and Republican Commissioner Melissa Holyoak, on the board of the FTC.
The Trump administration also plans to severely diminish the nation’s federal banking regulators – the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC). It also plans to cut staff at the FDIC by 1,200 or 20 percent. Federal banking regulators are seeking to narrow the focus of supervision from a broad array of risks to only financial risks, ignoring operational and new and novel risks that may arise.
Treasury Secretary Scott Bessent has said the Treasury Department intends to play a greater role in bank regulation, as the administration has begun rolling out a dangerous deregulatory agenda. In one particularly concerning example, the Fed has begun overhauling its annual stress tests, making them more predictable and more easily gameable for the largest and most systemically risky banks.
Trump’s Ambitious and Harmful Reconciliation Agenda
The 119th Congress has been historically unproductive in the first 100 days of Trump’s second term. However, this week, House Republicans began marking up text for a reconciliation bill – a privileged measure that Congress and Trump plan to use to pass partisan priorities, including slashing government assistance in exchange for trillions in tax cuts skewed towards the ultra-wealthy. While the reconciliation bill was not passed during Trump’s first 100 days, much of his time and attention has been spent on laying the foundation for this package, culminating in the passage of a budget resolution three weeks ago that instructed committees to begin work on his harmful and extreme proposals.
Despite a campaign focused on populist economics like slashing costs for working- and middle-class Americans, Trump’s tax plans are noticeably regressive, on par with the Tax Cuts and Jobs Act (TCJA) Trump championed during his first term:
Source: Institute on Taxation and Economic Policy
This skew is especially concerning when you consider that they plan to fund tax cuts through cuts to government assistance, potentially including programs for low-income Americans like Medicaid and SNAP.
However, as damaging as Trump’s tax plans are – especially when financed by spending cuts – this is only one part of the bigger picture on reconciliation. Eleven House Committees received instructions for reconciliation and are exploring harmful changes. Below, we provide a table that outlines the full reconciliation markup schedule in the House as it has been reported. The table also includes reminders about the reconciliation instructions each relevant committee received and the biggest threats under each Committee’s jurisdiction. We will provide an overview of this week’s and next week’s markups, as well as the specific proposals under consideration, in future updates.
Notably, the House has set a goal of Memorial Day for passing the package, meaning House Committees will have to move through the markup process before it gets packaged together by the House Budget Committee. Even if the House does manage to meet its ambitious timeline, the Senate is likely to make its own changes to the package, which could surely endanger the careful balance required to appease both House GOP moderates and fiscal hawks.
While this portion of Trump’s plan has not come to fruition during the first 100 days of this term, it is expected to be the vehicle for what he is hoping can be the signature piece of legislation for his second stint in the White House. It remains to be seen whether Republicans will be able to overcome intraparty conflicts and pushback from concerned voters, but Trump has been effective in navigating difficult margins in Congress to this point. Unfortunately, while passage of the reconciliation package would be a major victory for the President and his congressional allies, millions of Americans will be hurt by the harmful policy provisions it contains.
Conclusion
President Trump’s first 100 days in office have been marked by uncertainty, deregulation, and an assault on institutions and the rule of law. His administration has disrupted the global system of trade, cultivated a culture of fear and distrust, weakened hard-fought guardrails against fraud, and moved to cut programs the most vulnerable Americans rely on to survive. This has led to an already weaker, less safe, less stable, and less trusted American economy, with risk of recession growing every day.