Editorial: House economic plan should guide Trump

The Detroit News

Predictions that a Donald Trump presidential win would roil the financial markets quickly fizzled, with the markets ending the week sharply up. Investors seem to believe that regulatory relief is on its way.

And it should be. To keep the confidence high, President-elect Trump should pledge to enact the economic agenda laid out by Speaker Paul Ryan and the Republican House.

During the campaign, Trump was short on specific economic policies. He offered some proposals on taxes, and of course vowed to restrict free trade. But beyond that, he doesn’t have a comprehensive economic plan.

Ryan’s blueprint — dubbed “A Better Way” — hands Trump much of what he needs to get started. And with Republican control of both houses of Congress, there’s no reason the nation won’t finally address the obstacles that are holding back the recovery.

The first issue item on the priority list must be Obamacare. The crumbling health care law can and should be overhauled to address the shocking increases in health insurance premiums that hit consumers this fall.

The House plan would make the insurance system competitive and innovative. For those without access to employer healthy coverage, Medicare or Medicaid would be reworked to offer a refundable tax credit to help them buy insurance in the individual market.

The proposal also expands the use of tax-exempt health savings accounts to help consumers deal with high co-pays and deductibles.

It is not a complete scuttling of Obamacare, as many Republicans, including Trump, have loudly advocated. The Better Way plan protects coverage for patients with pre-existing conditions, encourages young people who have not done so under Obamacare to purchase policies, and prohibits sudden cancellations.

Equally important is unleashing the potential of the economy. Growth since the Great Recession is tepid, rarely reaching 2 percent a year. Ryan’s tax plan would provide stimulus by reducing the corporate income tax and incentivizing companies to repatriate overseas earnings by eliminating double taxation. That could pour more than $2 trillion back into the U.S. economy.

Congressional Republicans also would streamline and simplify the individual tax code and reward work by improving the earned income tax credit. They would stimulate business and job growth by reducing regulations and taxes on small businesses and provide tax-free returns on new investments.

These steps alone have the potential to drastically improve the country’s GDP, which grew at an average rate of just 1.95 percent from 2010 to 2013 — over a full percentage point below the previous decade’s.

Trump and Congress must also tackle reform of the Dodd-Frank financial industry regulations, which have made it harder for both businesses and potential home buyers to get credit.

There is pent-up growth in this economy that could be set free with policies that reduce the regulatory and tax burdens and relieve American’s of the crushing costs of Obamacare.