The policy analysis provided by the Charles Schwab & Co., Inc., does not constitute and should not be interpreted as an endorsement of any political party.
The 100-day mark has been a key—but artificial—bellwether of every presidency since Franklin Delano Roosevelt took office in 1933. Roosevelt, who came into office facing the Great Depression, a failing banking system and 25% unemployment, moved quickly to carry out sweeping policy changes. The 100-day checkpoint stuck and has become a measuring stick for all new presidents.
But it’s important to note that Roosevelt’s party had big majorities in both chambers of Congress, a markedly less polarized nation and a national crisis that galvanized action. Presidents since have tried (usually unsuccessfully) to distance themselves from this artificial time frame.
As President Donald Trump approaches his 100th day in office on April 29, Charles Schwab’s Vice President of Legislative and Regulatory Affairs Michael Townsend and Vice President of Trading and Derivatives Randy Frederick share their observations and some historical context:
- Confirmations have been relatively slow: Trump’s agenda has been hampered by the slow pace of nominations and confirmations of individuals to key administration posts. According to the Partnership for Public Service, there are 556 “key” positions requiring Senate confirmation. As of April 25, 2017, only 23 of Trump’s nominees had been confirmed. Only 23 additional individuals have been formally nominated (a requirement for the Senate confirmation process to begin) and only 40 others had been announced but not yet formally nominated. By comparison, President George W. Bush saw his entire cabinet confirmed by the end of January, just 10 days into his first term, and had made 275 nominations by the end of March 2001. President Barack Obama had nominated 130 people by the end of March 2009. As a result of the vacancies in the Trump administration, virtually every federal agency is missing senior leaders at the deputy secretary and assistant secretary levels—often, the people most responsible for development and implementation of specific policies.
- Trump’s cabinet picks often have come from the business world. Trump’s nominations have tended to have more business experience than political experience. More than one-third of Trump’s cabinet secretaries have no previous political experience, the most since President William McKinley (1897-1901).
- Yet perhaps Trump’s most important first 100-day accomplishment is a confirmation. The confirmation of Supreme Court Justice Neil Gorsuch may stand as the biggest accomplishment of Trump’s first months as president. Though it took a rule change by the Senate majority to prohibit a filibuster of Gorsuch’s nomination, Trump’s choice now sits on the highest court in the land and will have the ability to profoundly influence the policy and legal landscape for years to come.
- Trump’s most significant policy accomplishments have come via executive orders. With a bitterly divided Congress finding it difficult to accomplish any legislative goals, Trump’s use of executive orders to focus on deregulation and other policy initiatives stands as his most significant policy accomplishment of the first 100 days. Trump has signed more than 65 executive orders to, among other things, roll back Obama-era climate regulations; initiate a federal government-wide review of regulations; review the Dodd-Frank financial regulatory overhaul law; create a “2-for-1” directive that calls on agencies that want to promulgate a new regulation to pair that with two regulations that will be repealed; launch a review of the guest worker visa program; require federal agencies to buy goods and services from American companies and workers; form a commission to confront America’s opioid crisis; and reorganize and streamline the federal government.
- Trump’s biggest failure in the first 100 days is partly the result of moving too fast. The collapse of the effort to repeal and replace the Affordable Care Act, one of the central campaign promises of the new president, was a significant setback. Its failure was due to a number of reasons, but there’s no question that a contributing factor was the rush to get something big done quickly. While there is no evidence that the 100-day deadline influenced the rush, clearly lawmakers could have spent more time developing a proposal that could win broader support in Congress.
- Stock markets have been volatile. Uncertainty regarding how much Trump would accomplish, and how quickly, has caused the market to experience some unsettling swings in both directions. Periods of optimism have resulted in large single-day gains, such as a 1.4% move in the S&P 500® Index on March 1 following Trump’s address to Congress the previous evening. Likewise, there have also been some anxiety-inducing pullbacks, such as the 1.7% decline between March 16 and March 27, when it became clear that there were not enough votes to pass the health-care-reform bill. However, concern over the first round of the French elections and the success of another populist political figure, Marine Le Pen, caused the largest spike in volatility so far in 2017.
- Trump’s patience with a slow-moving Congress is already wearing thin. Trump promised his supporters they would see big changes quickly: health care reform, tax reform, a border wall, and an infrastructure package, to name a few of the items on his list. But internal warfare within the Republican majority in Congress, combined with the deeply rooted and profoundly bitter partisan divide in Congress, has raised questions about whether lawmakers can get anything significant done on Capitol Hill. How Trump reacts to the glacial pace of Congress in the months ahead merits close watching.
- The next big test will be tax reform. On April 26, the White House unveiled its principles for tax reform. The proposal would cut the corporate tax rate from 35% to 15%; three rates—10%, 25% and 35%—would apply to individual income. The plan also calls for the repeal of all deductions for individuals aside from the mortgage interest and charitable contribution deductions, and would repeal the alternative minimum tax and the estate tax. The top capital gains and dividends rate would remain at 20% and the 3.8% surtax on investment income for wealthier filers—enacted under the Affordable Care Act—would be repealed. Turning these principles into a legislative proposal that can pass both the House and Senate will be an enormous task that could dominate the next several months—and will severely test the ability of Trump and congressional Republicans to get a big win.
- Market performance during Trump’s initial months has been relatively strong. Among the last seven presidents, the market performance during Trump’s first 100 days has been exceeded only once, by President George H.W. Bush. Looking farther back, the 104% rise in the S&P 500 during President Franklin Roosevelt’s first 100 days—partly a result of Roosevelt’s being first elected during the depths of the Great Depression—has not yet been surpassed. The S&P 500’s return during Roosevelt’s first full year in office, 1933, was more than 44%, also a record that still stands.
Bottom line: The first 100 days is an arbitrary yardstick for accomplishment, although it’s interesting to look back and compare the early days of various administrations. It’s too early to tell what the Trump administration ultimately will accomplish. In the meantime, we caution investors not to react to each and every political bump in the road—four (or eight) years is a long journey. Also, over time, it’s usually best to ignore the headlines and remain focused on your long-term investment plan.
What you can do next
- If you’ve built a solid financial plan and a well-diversified portfolio, it’s best to ignore the political noise and focus on your long-term goals. Want to talk about your portfolio? Call our investment professionals at 800-355-2162.
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